Who can claim a deduction under section 80DD?
Deduction under section 80DD of the income tax act is allowed to Resident Individuals or HUFs for a dependant-who is differently-abled and– is wholly dependent on the individual (or HUF) for support & maintenance.
Below are the conditions you must meet to avail this deduction –
- Deduction is allowed for a dependant of the taxpayer and not the taxpayer himself.
- The taxpayer is not allowed this deduction if the dependant has claimed a deduction under section 80U for himself/herself.
- Dependant in case of an individual taxpayer means spouse, children, parents, brothers & sisters of the taxpayer. In case of a HUF means a member of the HUF.
- The taxpayer has incurred expenses for medical treatment (including nursing), training & rehabilitation of the differently-abled dependant or the taxpayer may have deposited in a scheme of LIC or another insurer for maintenance of the dependant.
- Disability of the dependant is not less than 40%.
- Disability is defined under section 2(i) of the Persons of Disabilities Act, 1995
When the above conditions are met, amount of deduction allowed is –
- Rs 75,000 (Starting from the financial year 2015-16) where disability is more than 40% and less than 80%.
- Rs 1,25,000 (Starting from the financial year 2015-16) where disability is more than 80%.
- These deductions are allowed irrespective of your actual expenditure.
Do note that before the Financial Year(FY) 2015-16 (FY 2014-15 & earlier years) – The deduction limit was of Rs 50,000 for disability at least 40% and Rs 1,00,000 for disability above 80%.