Did you know that the expenses you incurred on the treatment of your dependent with disability can be claimed as deduction from your taxable income? Yes, under section 80DD of income tax act such deduction is allowed to be claimed by an individual and HUF who;
1. Incurs any expenditure for the medical treatment (including nursing), training and rehabilitation of a disabled dependent; or
2.Deposits under any approved scheme of Life Insurance Corporation or any other insurer or the administrator any amount for the maintenance of a disabled dependent or for an annuity or a lump sum amount to be paid to the dependent or the nominee for the benefit of the dependent, in the event of the death of the individual depositing the money.
U/s 80DD the upper limit has been fixed with a deduction of Rs 50,000 general treatment for dependent. A higher deduction of Rs. 1,00,000 will be allowed, where such dependent is a person with severe disability having any disability of 80% or above.
If the death of the dependent occurs before that of the assessee, the amount in the scheme is returned to the individual and is taxable in his/her hands in the year that it is received. An individual should furnish a copy of the issued certificate by the medical board constituted either by the Central government or a state government in the prescribed form, along with the return of income of the year for which the deduction is claimed.
Definition of relative: Who can be your disabled dependent?
1. For individuals, your spouse, son / daughter (any child), parents and brother / sister (siblings) can be your handicapped dependents.
2. For HUFs, any member of the HUF can be a disabled dependent.
3. The disabled person should be wholly or mainly dependent on you for his / her support and maintenance, and should not have claimed deduction under section 80U.
Few more points to be noted
1. Deduction u/s 80DD is not available to non-resident Indian (NRI).
2. For claiming the deduction the taxpayer shall have to furnish a copy of the certificate issued by medical authority alongwith return of income in form no. 10-IA or in the case of disability requires reassessment, a fresh certificate from medical authority for claiming deduction.
3. The Taxpayer should have opted for any (or both) of the following options-
- a. The taxpayer has incurred an expenditure for the medical treatment (including nursing), training and rehabilitation of a dependent (being a person with disability).
- b. The taxpayer has deposited or paid under any scheme framed in this behalf by the life Insurance Corporation or any other insurer, or the administrator or specified company and approved by the Board in this behalf, for maintenance of dependent (being a person with disability).