Chapter VIA of the Income Tax Act covered certain deductions that are allowed from the Gross Total Income of the assessee. This chapter also covered deduction under section 80DD, which allows taxpayers to claim a deduction for the medical treatment of a dependant person. Here in this post, we will discuss Section 80DD of Income Tax Act for AY 2021-22.
Section 80DD of Income Tax Act
Deduction under section 80DD is allowed for the medical treatment of a dependant with severe disabilities or differently-abled. This section allowed a deduction to resident individuals and HUF only.
This section also covers deduction, if the assessee paid or deposits any amount with the specified company, as specified by the department on this behalf.
Deduction limit, disabilities covered, documents required for claiming deduction under section 80DD of Income Tax Act for AY 2021-22 are covered here in this post.
What is the deduction limit under section 80DD of Income Tax Act for AY 2021-22
Section 80DD Limit For AY 2021-22: The amount that can be claimed as deduction u/s 80DD is based on the disability or severe disability of the dependant.
a) Dependant person with a disability- It means the person with a disability has at least 40% of any of the specified disabilities. The taxpayer who takes care of the medical charge of the dependent person with a disability can claim a deduction of Rs. 75,000.
b) Dependant person with a severe disability- It means the person with a severe disability has at least 80% of any of the specified disabilities. The taxpayer who takes care of the medical charge of the dependent person with a severe disability can claim a deduction of Rs. 1,25,000.
Also Read- Deduction Limit: Section 80D of The Income Tax Act for AY 2021-22
Who are eligible to claim deduction under section 80DD?
Section 80DD of Income Tax Act for AY 2021-22- Deduction u/s 80DD can be claimed by Individuals and HUF only, provided that the assessee should be resident in India during the relevant previous year and he paid any amount as follow-
– Incurred any expense for the medical treatment (including nursing), training, and rehabilitation of a dependent, being a person with a disability.
– Paid or deposited any amount under a scheme framed on this behalf by the Life Insurance Corporation or any other insurer or the Administrator or the specified company for the maintenance of a dependant, being a person with a disability.
Further, provided that the deduction is eligible to the taxpayer (resident Individuals or HUF) for the medical expenses of the dependant paid by him (as above)
Deduction under section 80DD can not be claimed by non-resident Indians and any corporate or any other entity.
Must Read- Deduction Limit, Documents & Eligibility: Section 80DDB of The Income Tax Act for AY 2021-22
What type of Disabilities are covered u/s 80DD?
According to the Income Tax Act, the following are the eligible disabilities, that are taken into considerations for claiming deduction under section 80DD of Income Tax Act for AY 2021-22
- Hearing Impairment
- Mental retardation
- Mental illness
- Autism
- Cerebral palsy
- Blindness
- Low vision
- Leprosy-cured
- Locomotor disability
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List of Documents required for claiming deduction under section 80DD
For claiming deduction u/s 80DD, the assessee has to provide the following list of documents-
– Medical Certificate: It should authenticate the disability of the dependant.
– Form 10-IA: If the disabled dependant suffering from autism, cerebral palsy, or multiple disabilities, then form no. 10-1A has to be submitted.
– Self Declaration Certificate: This has to be submitted with the total expenses incurred for the medical treatment of the disabled dependant.
– Receipts of Insurance Premium Paid: Since the self-declaration certificate has been attached for all the expenses incurred, so there is no need to show actual receipts but if a claim is made towards insurance policies taken for the dependant then the actual receipts of the expenses need to be maintained.
Must Read- Last Date For Filing Income Tax Return For AY 2021-22
Medical Certificate for the Disabled Dependant.
As per the Income Tax Laws, the following mentioned medical authorities can certify a person as disabled-
– A Civil Surgeon or Chief Medical Officer (CMO) of a government hospital.
– A Neurologist with a Doctor of Medicine (MD) Degree in Neurology. If it is for a child then a Pediatric Neurologist holding an equivalent degree.
Also Read- What is the Interest and Penalty for late filing of ITR for AY 2021-22
Some Important Points for claiming deduction under section 80DD.
The following points are needed to remember for claiming deduction under Section 80DD of Income Tax Act for AY 2021-22.
- For the purpose of section 80DD, dependants can be spouses, children, parents, brothers, and sisters of the taxpayer and in the case of HUF any member of that HUF.
- The taxpayer can not claim the deduction if the dependant has already claimed a deduction u/s 80U for himself or herself.
- 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 the maintenance of the dependant.
- The disabled person is wholly or to a large extent dependant on the taxpayer for their support.
Frequently Asked Question- FAQs
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Who can claim deduction under section 80dd?
Deduction u/s 80DD can be claimed by Individuals and HUF only, provided that the assessee should be resident in India during the relevant previous year. Deduction under section 80DD can not be claimed by non-resident Indians and any corporate or any other entity.
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What is an 80dd exemption?
For claiming deduction u/s 80dd, the taxpayer has to incur 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 the maintenance of the dependant.
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How much we can claim under 80DD?
Section 80DD of Income Tax Act for AY 2021-22: The amount that can be claimed as deduction u/s 80DD is based on the disability or severe disability of the dependant.
a) Dependant person with a disability- It means the person with a disability has at least 40% of any of the specified disabilities. The taxpayer who takes care of the medical charge of the dependent person with a disability can claim a deduction of Rs. 75,000.
b) Dependant person with a severe disability- It means the person with a severe disability has at least 80% of any of the specified disabilities. The taxpayer who takes care of the medical charge of the dependent person with a severe disability can claim a deduction of Rs. 1,25,000.
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What documents are needed for 80DD?
For claiming deduction Section 80DD of Income Tax Act for AY 2021-22, the assessee has to provide the following list of documents-
– Medical Certificate: It should authenticate the disability of the dependant.
– Form 10-IA: If the disabled dependant suffering from autism, cerebral palsy, or multiple disabilities, then form no. 10-1A has to be submitted.
– Self Declaration Certificate: This has to be submitted with the total expenses incurred for the medical treatment of the disabled dependant.
– Receipts of Insurance Premium Paid: Since the self-declaration certificate has been attached for all the expenses incurred, so there is no need to show actual receipts but if a claim is made towards insurance policies taken for the dependant then the actual receipts of the expenses need to be maintained.
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Disclaimer: The information contained in the above article are solely for informational purpose after exercising due care. However, it does not constitute professional advice or a formal recommendation. The author does not own any responsibility for any loss or damage caused to any person, directly or indirectly, for any action taken on the basis of the above article.
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Compiled by- CA Chirag Agarwal (Practicing Chartered Accountants)