Section 80DD of the Income Tax Act provides tax deductions to family members taking care of disabled dependent members of the family. It outlines a flat-out tax deduction regardless of their income level.
The deductions under this section include exemptions for expenses borne for medical treatments and deposited amounts under a scheme. Given below are vital terms and their subsequent definitions under Sec. 80DD of the Income Tax Act of 1961.
Disabled Dependent
Disabled dependents can include family members such as spouse, children, siblings and parents of the individual. For Hindu Undivided Families (HUFs), they include a member of the HUF.
Disabled individuals must fully or majorly depend on the taxpayer for their needs. However, if you have already claimed the deductions under Section 80U, you are ineligible for Section 80DD.
Disability
The definition of disability is similar to one provided in the Persons with Disability (Protection of Rights, Full Participation, and Equal Opportunities) Act, 1955. It also includes that which is mentioned in the National Trust Act of 1999, such as autism, cerebral palsy, and multiple disabilities.
Given below is an overview of the conditions covered u/s 80DD of the Income Tax Act:
People with Autism Spectrum Disorder: It is a condition that affects skill development and results in adverse communication and social abilities
Suffering From Blindness: This is a condition when there is total vision loss, vision acuity not exceeding 20/200, or vision restriction of at least 20 degrees
Individuals with Hearing Impairments: This is a condition where the person experiences hearing loss at 60 decibels and above
People with Loco-motor Disabilities: In this condition, the disability of bones, muscles, or joints significantly limits the person’s movement
Individuals with Mental Disorders: This includes mental disorders except mental retardation
- People with Impaired Vision: These include people with impaired vision, even after treatment or correction, but can use the vision to complete a task with the appropriate assistance device
Section 80DD provides eligible individuals with a fixed deduction, no matter the age or income group. An explanation of the deductions is as follows.
40% Disability
A caretaker may get a deduction on taxes up to ₹75,000. However, you must furnish a medical practitioner’s certified statement that asserts a disability of 40% and above.
80% Disability
In case of severe disability, i.e., 80% and above, the person responsible for the expenses of the disabled dependent can claim an exemption of up to ₹1.25 Lakhs.
Check the table to learn about the Section 80DD deduction limit available for different levels of disability:
Disability Percentage |
Deduction |
40% and above |
₹75,000 |
80% and above (severe) |
₹1.25 Lakhs |
If you wish to claim any deductions under Section 80DD of the Income Tax Act, you have to furnish the following documents:
Form 10IA
Self-declaration
ITR papers
- A medical certificate asserting the extent of the disability
Section 80DD applies to insurance and schemes that cater specifically to the well-being and caring of disabled dependents. For the deposit amount or the sum insured, one must keep the following points in mind.
In the event of the caretaker’s death, the disabled dependent will be the prime nominee of the deposited sum
In case of the primary caretaker’s death, the insurance can be handed over to the first caretaker in line
- The annuity or the lump sum insured can be made accessible to the disabled dependent upon maturing to the age of 60 years
There have been cases wherein the disabled dependent passes away before the primary caretaker does. In such instances, the amount that is deposited in the insurance or scheme will be considered as the taxpayer’s income during the year in which that amount is received and taxed accordingly.
All these sections allow taxpayers to claim tax deductions or benefits for the expenses borne for medical reasons, either of themselves or their dependents. However, the conditions to qualify for these benefits and the limit vary.
Here is an overview of the differences between these sections:
Section 80DD |
Section 80DDB |
Section 80D |
Section 80U |
Medical needs and treatment for disabled dependents |
Medical treatment requirements for oneself or a dependent for certain disease specified |
Health insurance and preventive medical expenses |
Expenses for medical requirements incurred directly by the disabled taxpayer, considered as the assessee |
1. 40% disability: ₹75,000
|
1. Amount paid
2. Below 60 years of age: ₹40,000
3. Above 60 years of age: ₹1,25,000 |
1. Up to ₹1 Lakh for specific conditions. |
1. Normal (40% disability): ₹75,000
|
Disclaimer: The limits and conditions may change to reflect any amendments to the sections. You must verify the same on the official portal of the Income Tax Department.
FAQs on Section 80DD of the Income Tax Act
Is there a tool that can help me calculate my deductions as per Section 80DD?
Yes, you can use the tax exemption calculator provided by the Income Tax Department of India to calculate your tax benefits.
Where can I get a disability certificate from?
To claim a deduction under 80DD, you need to furnish a certificate issued by a recognised medical authority. The details of this authority are provided in the PwD Act of 1995 and the National Trust Act of 1999.
Is cerebral palsy included under Section 80DD?
Yes, along with other disabilities, cerebral palsy is included under Section 80DD.
Are ITR papers required for applying for deductions under Section 80DD?
Yes, ITR papers are mandatory when it comes to applying for the tax benefits provided under Section 80DD.
Is Section 80U and Section 80DD the same?
While both provide similar tax exemptions, Section 80U holds the disabled individual as an assessee. On the other hand, Section 80DD considers the caretaker of the disabled dependent as the assessee.
What is the Section 80DD deduction limit?
The Section 80DD limit depends on the severity of your disabled dependent’s condition. If the medical certificate states the condition as 40% and above, the limit is ₹75,000. In the case of 80% and above (severe disability), the limit extends to ₹1.25 Lakhs.
What is Section 80DD of the Income Tax Act?
Section 80DD provides tax deductions for expenses on the maintenance, treatment, and rehabilitation of a dependent with a disability. The deduction is ₹75,000 for disability and ₹1.25 lakh for severe disability.
What are the benefits of Section 80DD?
Section 80DD provides tax deductions for the medical treatment and rehabilitation of a disabled dependent. You can claim up to ₹75,000 for disability and up to ₹1.25 lakh for severe disability. The benefits apply to individuals with differently-abled dependents and cover treatment costs.
Do I need proof for claiming Section 80DD deductions?
Yes, to claim deductions under Section 80DD, you need a medical certificate verifying the dependent's disability, Form 10-IA for specific conditions like autism and cerebral palsy, and a self-declaration of expenses for treatment and care.
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