Section 80DD: Deduction on Maintenance of Disabled Dependent

Section 80DD can be claimed by both HUFs and Individual on Expenses related to medical treatment, training and rehabilitation of a Disabled Dependent

Essential conditions for claiming deduction tinder this section:

(1) Deduction is available to a person who is:

(a) resident in India, and

(b) is either an individual or an HUF.

(2) Deduction is available if the assessee has during the previous year:

(a) incurred any expenditure for the medical treatment (including nursing), training and rehabilitation of a dependent, being a person with disability; or

(b) paid or deposited any amount, under any scheme framed by the LIC or any other insurer or UT! and which is approved by the CBDT. The scheme should provide from the payment of annuity or a lump sum amount for the benefit of a dependant being a person with disability in the event of the death of the individual or the member of the HUF, in whose name subscription to the scheme has been made by the HUF for the benefit of the handicapped member. The assessee must nominate either the dependant being a person with disability or any other person or a trust to receive the payment on his behalf for the benefit of the dependant being a person with disability.

(3) The assessee, claiming a deduction under this section, shall furnish a copy of the certificate issued by the medical authority in the prescribed form and manner, along with the return of income under section 139 in respect of the assessment year for which deduction in claimed.

Further where the condition of disability requires reassessment of its extent after a period stipulated in the aforesaid certificate, no deduction under this section shall be allowed for any assessment year relating to any previous year beginning after the expiry of the previous year during which the aforesaid certificate of disability had expired, unless a new certificate is obtained from the medical authority in the form and manner, as may be prescribed, and a copy thereof is furnished along with the return of income.

Where the condition of disability is temporary and requires reassessment after a specified period, the certificate shall be valid for the period starling from the assessment year relevant to the previous year during which the certificate was issued, and ending with the assessment year relevant to the previous year during which the validity of the certificate expires. [Rule 11A(2)].

Quantum of Deduction under Section 80DD :

Rs.75,000 from his gross total income, irrespective of actual expenditure incurred/amount deposited.

Rs.1,25,000 (instead of Rs.75,000), where such dependant is a person with severe disability.

Notes for Reference Purposes :

Meaning of “dependant”: “Dependant” means—

(a) in the case of an individual, the spouse, children, parents, brothers and sisters of the individual or any of them,

(b) in the case of a Hindu undivided family, a member of the Hindu undivided family,

dependant wholly or mainly on such individual or Hindu undivided family for his support and maintenance, and who has not claimed any deduction under section 80U in computing his total income for the assessment year relating to the previous year.

Meaning of “disability”:

“Disability” shall have the meaning assigned to it in clause (I) of section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 and includes autism, cerebral palsy and multiple disability as provided for in the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999.

Meaning of “medical authority”:

“Medical authority” means any hospital or institution specified for the purposes of this Act by notification by the appropriate Government.

Meaning of “person with disability”:

“Person with disability” means a person suffering from not less than 40% of any disability as certified by a medical authority. The medical authority for certifying ‘Autism’, ‘Cerebral Palsy’, ‘Multiple Disabilities’ and ‘Severe Disability’ referred to in section 2(a), (c), (h), (j) and (o) of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 shall consist of the following:

(i) A neurologist – having degree of Doctor of Medicine (MD) in neurology, or

(ii) A Civil Surgeon or Chief Medical Officer in a Government Hospital.

“Disability” means—

(i) blindness; (ii) low vision; (iii) leprosy-cured; (iv) hearing impairment; (v) locomotor disability; (vi) mental retardation; (vii) mental illness.

Meaning of “person with severe disability”:

“Person with severe disability” means a person with 80% or more of one or more disabilities.

Consequences if the dependant being a Person with Disability predeceases the Individual or the member of the HUF [Section 80DD(3)]:

If the dependant being a person with disability predeceases the individual or the member of the HUF in whose name money has been deposited, an amount equal to the amount paid or deposited under the scheme shall be deemed to be the income of the assessee of the previous year in which such amount is received by the assessee and shall accordingly be chargeable to tax as the income of that previous year.

Tags: Deduction