There are situation where our known person suffers from a disease and we are looking after them and generally we don’t any deduction of doing such personal expense from our taxable income. However for some severe diseases we do get deduction which has been mentioned u/s 80DD of the Income Tax act.
As per section 80DD one would be eligible for the deduction if:
“Where an assessee, being an individual or a Hindu undivided family, who is a resident in India, has, during the previous year,—
(a) incurred any expenditure for the medical treatment (including nursing), training and rehabilitation of a dependant, being a person with disability; or
(b) paid or deposited any amount under a scheme framed in this behalf by the Life Insurance Corporation or any other insurer or the Administrator or the specified company subject to the conditions specified in sub-section (2) and approved by the Board in this behalf for the maintenance of a dependant, being a person with disability,
the assessee shall, in accordance with and subject to the provisions of this section, be allowed a deduction of a sum of seventy-five thousand rupees from his gross total income in respect of the previous year:
Provided that where such dependant is a person with severe disability, the provisions of this sub-section shall have effect as if for the words “seventy-five thousand rupees”, the words “one hundred and twenty-five thousand rupees” had been substituted.”
Thus according to above provisions section 80DD can be understood as:
Available to: Individual or HUF
Available when: Individual or HUF incurring expenditure or depositing in above mentioned scheme for dependent person with disability.
Amount of deduction: Rs. 75,000 for a person with disability and Rs. 1,25,000 if a person with suffering with severe disability. This deduction is a flat deduction without any minimum amount or on actual basis.
For above deduction:
“dependant” means—
(i) in the case of an individual, the spouse, children, parents, brothers and sisters of the individual or any of them
(ii) 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;
Disability includes: “autism”, “cerebral palsy” and “multiple disability”.
Person with severe disability means:
“person with severe disability” means—
a person with eighty per cent or more of one or more disabilities, as referred to in sub-section (4) of section 56 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 1996); or
a person with severe disability referred to in clause (o) of section 2 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 (44 of 1999);
For claiming the above deduction one needs to get a certificate in Form 10-IA from the authority.
The authority could be: Neurologist having a degree of Doctor of Medicine (MD) in Neurology (in case of children, a Paediatric Neurologist having an equivalent degree); or a Civil Surgeon or Chief Medical Officer in a Government hospital.
If the certificate is for a certain duration or needs reassessment and if the assessee doesn’t get it done then the deduction would be disallowed and such amount would be a part of income of the assessee.
Also if the person with disability predeceases the individual or the member of the Hindu undivided family referred to in sub-section (2), an amount equal to the amount paid or deposited under clause (b) of sub-section (1) 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.
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