Know the Eligibility Criteria for Tax Deduction Under Section 80DD

What exactly is Section 80DD of the Income tax act?

What Exactly is Section 80DD of the Income Tax Act?

Section 80DD of the Income Tax Act allows residents, whether individuals or HUFs, to claim a deduction for a dependent who is differently abled and completely reliant on them for support and maintenance.

Families who provide care for disabled dependents are eligible for tax breaks under Section 80DD. Individual caregivers and Hindu Undivided Families can both make this claim (HUF).

Families of disabled individuals are qualified for a deduction under Section 80DD for the cost of caring for a dependant who is disabled. Families, not the dependents themselves, may make deductions under Section 80DD.

If a disabled person has already claimed the same deduction under Section 80U, they are not eligible to do so again under Section 80DD.

Section 80DD benefits may be claimed by HUFs and those who are caring for a disabled dependent. Deductions are allowed for costs associated with caring for dependents who are disabled.

Insurance premiums paid to certain insurers to support a disabled dependent are also included in the deduction amount.

Eligibility Criteria to Claim Tax Deduction Under Section 80DD

  • A deduction is only available for the taxpayer’s dependant, not for the taxpayer personally.
  • Only residents of India may apply for the deduction.
  • The dependent cannot claim this deduction if they have already claimed one for themselves under section 80U.
  • The taxpayer may have contributed to a LIC or other insurer’s maintenance plan, or they may have paid for the maintenance, training, and rehabilitation of the dependent (including nursing fees).
  • An undivided Hindu family and a resident taxpayer both qualify for a tax deduction under Section 80DD. A dependent may be eligible for such a deduction.

*The term “dependant” in the case of a single taxpayer means a member of a HUF when referring to a HUF, including the taxpayer’s spouse, children, parents, brothers, and nieces and nephews.

*The dependent belongs to the HUF when there is a HUF involved.

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Kinds of Deductions Allowed Under Section 80DD?

With respect to both age and spending amount, this section provides a set deduction. If –

Dependent with severe disability – A dependent with a severe disability is someone who has at least 80% of any disability. A family member can claim a tax deduction of up to Rs. 1,25,000 for paying the dependent person’s medical costs who has a serious disability.

Dependant person with a disability – A dependent person with a disability is someone who has at least 40% of any of the disabilities. A family member may claim a tax deduction of up to Rs 75,000 if they pay for the dependent person’s medical expenses who has a disability.

How to Claim a Deduction Under Section 80DD?

The person claiming the deduction must submit an ITR and a photocopy of the medical expert’s certificate in the required form, Form 10-IA, and in a legitimate way. Since almost no document is required to be associated with an ITR, keeping the paperwork on hand is advised.

Necessary Documents to Claim Deduction Under Section 80DD

According to Section 80DD of the Income Tax Act of 1961, the following documents must be provided in order to receive tax benefits:

Medical Certificate: The taxpayer must provide a copy of the medical certificate attesting to the dependent’s handicap in order to claim a tax credit under Section 80DD.

Receipts for Insurance Premium Paid: Since the self-declaration certificate will be sufficient to claim the majority of expenses, the individual is not obliged to keep the actual receipts. The actual receipts for the expenses must be kept on file, nevertheless, if a claim is made for the money paid toward insurance policies purchased for the disabled dependent.

Self-Declaration Certificate: Taxpayers are required to present a self-declaration certificate detailing the costs expended for the disabled dependent’s medical care, including nursing, rehabilitation, and training.

Form 10-IA: You must file Form No. 10-IA if your dependent is disabled and has multiple disabilities, including autism, cerebral palsy, or both.

Read More: Section 80C of Income Tax: What it is & How to Save Tax?

FAQs

What types of expenses are deductible under Section 80DD of the Income Tax Act?

Medical care costs for a disabled dependent, including nursing, training, and rehabilitation, as well as premiums for specific insurance policies for the dependent, are tax-deductible under Section 80DD of the Income Tax Act.

Can NRIs claim a tax deduction under Section 80DD?

No, under Section 80DD of the Income Tax Act of 1961, NRIs are not eligible for a deduction. Only Indian citizens and HUFs are eligible to claim tax benefits under this Section.

What distinguishes Sections 80U and 80DD from one another?

A person who has been certified as disabled may be eligible for tax benefits under Section 80U of the Income Tax Act. A family member who pays for a disabled dependent’s medical care may claim a tax deduction under Section 80DD.

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