CA Sandeep Kanoi

CA Sandeep KanoiDeduction u/s. 80DD for expenses on maintenance/ medical treatment of disabled dependent

In Past few years cost of medical treatment has shoot up very sharply and has made medical treatment almost out of reach of Lower and Middle class families in India. Government of India has in order to provide some relief to those who have a dependent with disability or sever disability provided some relief’s from Income tax under section 80DD of the Income Tax Act, 1961.

Who is eligible to claim deduction?

· Individual or a Hindu undivided family, who is a resident in India.

· Deduction u/s 80DD is not available to non-resident Indian (NRI).

1212135454What Expenses are eligible for deduction?

· Expenditure for the medical treatment (including nursing), training and rehabilitation of a disabled dependent.

· Money paid to Life Insurance Corporation (LIC), Unit Trust of India or any other insurer for the purpose of buying specified scheme or insurance for the purpose of maintenance of such dependant.

Definition of relative: Who can be your disabled dependant?

⇒ For individuals, your spouse, son / daughter (any child), parents and brother / sister (siblings) can be your handicapped dependants.

⇒For HUFs, any member of the HUF can be a disabled dependant.

⇒The disabled person should be wholly or mainly dependant on you for his / her support and maintenance, and should not have claimed deduction under section 80U.

Read More- Budget 2015- Section 80DD deduction Limit Raised

Some considerations for the insurance premium

· Not all schemes qualify – there are specific schemes meant for this purpose. The policy has to insure your life. i.e. it should be in your name.

· Premium is required to be paid on annual basis or a lump sum amount for the benefit of the disabled dependant.

· Nomination of Policy should be in the name of (a) your disabled dependant, or (b) any other person or trust that would receive the money for the benefit of your disabled dependant

Policies in which one can invest

lic121223♣  Life Insurance Corporation of India offers Jeevan Vishwas policy for the benefits of parents or guardian of person with physical disabilities which qualify for tax benefit under Section 80DD.

This policy ensure that the dependant person with physical handicap does not have to depend on anybody for financial support in case something happens to his parent or guardian.  Jeevan Vishwas is a policy which participates in profits.

Under this insurance policey, the life of the person, on whom the handicapped person is dependant, is insured. In case the dependant dies before the guardian/parent, the parent/guardian will have the option to either keep the policy for a reduced paid-up sum assured or entitled to receive the refund of premiums paid.

However if the parent/guardian dies before the dependant, 20% of the lump sum assured becomes payable for the benefit of the dependant. Moreover the balance is paid by way of monthly annuity for 15 years for sure and thereafter for life on the life of dependant.

♣ The health insurance cover provided by National Trust needs special mention. The trust has introduced “Niramaya” health Insurance Scheme for persons with disabilities like Autism, Cerebral Palsy and Mental Retardation etc. Under this scheme, for those who have family income of less than Rs. 15,000 per month, you need to make a payment of Rs. 250 per year. For the person having family income of more than Rs. 15,000 per month is required to pay an amount of Rs.500 per year. For the families which are Below Poverty Line (BPL) this scheme is free, provided the applicant holds the BPL card. This scheme covers health expenses up to a limit of Rs. 100,000 per year for the person suffering from these disabilities. The scheme is administered by National Trust in collaboration with ICICI Lombard. Under this scheme even existing disease are covered without any medical check up. Moreover this plan covers routine expenses like medical check up, transportation and corrective surgery etc. which are not covered under regular health insurance products.

What is considered as disability and Severe Disability?

Disability would be as defined under clause (i) of section 2 by the “Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995” and will also include disabilities  referred to in clauses (a), (c) and (h) of section 2 of National Trust for welfare of Person with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999.

It includes the following:

· Blindness

· Low vision

· Leprosy-cured

· Hearing impairment

· Locomotor disability

· Mental retardation

· Mental illness

· Autism

· Cerebral palsy

· Multiple disabilities

A person with disability means a person suffering from not less than 40% of any of the above disabilities.

Severe disability means 80% or more of one or more of the above disabilities.

Other Conditions to claim deduction

· For claiming the deduction in respect of the above, you have to furnish a medical certificate of disability from a Government Hospital certifying the disability of the dependant. The certificate needs to be renewed periodically.

· For people having Autism, Cerebral Palsy or multiple disabilities, form number 10-IA needs to be filled up. There are two other formats for person suffering from mental illnesses and all other disabilities.

· People have to furnish self declaration certifying the expenditure incurred on account of medical treatment (including nursing), training and rehabilitation of the handicapped dependant.

· You do not have to preserve the actual receipts for expenses incurred. However you will have to produce the actual receipts in case you claim deduction in respect of payment made to LIC, UTI etc for the purpose of buying insurance or other schemes for maintenance of such dependant.

Who can issue medical certificate of disability?

· Neurologist having a degree of Doctor of Medicine (MD) in Neurology (or, in case of children, a Pediatric Neurologist having an equivalent degree)

· A Civil Surgeon or Chief Medical Officer (CMO) of a government hospital

Taxability of Premium Amount Paid in Case disable dependant dies before the taxpayer:- In case your disabled dependant predeceases you (that is, dies before you); the amount in the policy is returned to you. This would be treated as your income for the year in which you receive it, and would be fully taxable in your hands.

Amount of Deduction and Tax Saving

  • The deduction allowed is Rs. 50,000 if disabled dependant is not suffering from severe disability. Limit is Raised to Rs. 75,000/- from A.Y. 2016-17.
  • Deduction allowed goes up to Rs. 1,00,000 if disabled dependant is a person with severe disability.Limit is Raised to Rs. 1,25,000/- from A.Y. 2016-17.
  •  Deduction not depend on amount of expenses incurred:- Even if your actual expenses on above mentioned disabled dependent relative is less then amount mentioned above you will be eligible to full deduction.

Please Note –

a) Individuals would need to produce a copy of the disability certificate as issued by the central or state government medical board to claim deduction.

b) Insurance policy obtained must be in your name and should be a policy for life. It could pay either an annuity or a lump sum amount for the benefit of the dependent on your death.

c) If the disabled dependent predeceases you, the policy amount is returned to you, and treated as income for the year in which you receive it, thus fully taxable in your hands.

Conclusion:- The physical and mental agony experienced by the parents/ guardian of such dependants cannot be taken away but Government of India, National Trust, LIC and other charitable institutions are doing commendable job by reducing the financial agony of such families. It is important for all of us to look for such benefits available and talk these about in various media to take it across as many people as possible. This is a bit of social work which can give relief to handicapped persons and their parents.

Frequently Asked Questions

Question – I am a salaried person who had a son with hearing impairment. My son underwent an operation for cochlear implantation and I spent around Rs 6 lakh for it. Can I get any tax benefit for the treatment expenses?

Answer:- Section 80DD allows a deduction to an individual or HUF if the person has incurred in the previous year any expenditure on medical treatment (including nursing), training and rehabilitation of a dependant with a disability or paid or deposited any amount under a scheme framed in this behalf by an insurer for the maintenance of a dependant with a disability.

A person with a disability is one suffering from not less than 40 per cent of a disability (as certified by a medical authority working in a hospital or institution notified by the Government), which could be blindness, low vision, leprosy – cured, hearing impairment, locomotor disability, mental retardation, mental illness.

Hearing impairment, for this purpose, means a loss of 60 decibels or more in the better ear in the conversational range of frequencies.

A person with disability also includes the one suffering from autism, cerebral palsy, mental retardation or a combination of any two or more. Section 80DD allows a deduction of up to Rs 75,000 a year and if the disability is severe, up to Rs 1,25,000 a year. Severe disability means a person with 80 per cent or more of the disability. You can claim deduction if your fits into these categories.

Question:- My father is a pensioner and his pension is less than my salary. My sister is a disabled dependant with 85% disability. She is dependant on me. Can I get rebate under section 80DD? My Assessing Officer says that your father is alive and is getting pension; so you cannot claim deduction. Is it true?

Answer:- Your Assessing Officer is not correct. The deduction u/s 80DD is for dependant of an individual tax payer and dependant includes brother and sister of Individual. You can furnish to Your Assessing officer an undertaking from your father that your sister is dependant on you and not on your father.

Question:- I have a handicapped dependant who is my cousin ( Daughter of my mother’s sister). She is completely dependant on me and every month I spend Rs 10,000. She is suffering from 85 % Blindness and mental problem. I wanted to know whether I can claim tax benefit under 80DD?

Answer U/s. 80DD dependant means in the case of an individual, the spouse, children, parents, brothers and sisters of the individual or any of them;

It is clear that section 80DD is applicable only if the person on whom you are spending are any one of following

  •  your wife or husband
  •  your children
  •  your parents
  •  your brother
  •  your sister
  •  your wife’s or husband’s brother or sister
  •  your parents’ brother or sister

The Daughter of your mother’s sister is, clearly, not coming under the definition of dependant for the purpose of claim of deduction u/s 80DD. So, you can not claim deduction u/s. 80DD in respect of expenses incurred for her maintenance and medical treatment.

Question– Brother of Mr. Raja (a resident) is totally blind and is dependent on Mr. Raja. During the Assessment year 2016-17, Mr. Raja has incurred expenditure of Rs. 10,000 on training and rehabilitation of his brother. Can Mr. Raja claim any deduction in respect of expenditure incurred by him on maintenance of his physically handicapped brother?

Answer- In this case, all the criteria of section 80DD are satisfied and hence, Mr. Raja can claim a flat deduction of Rs. 1,25,000 under section 80DD (since his brother is suffering from 100% disability).

Suppose in the above case, instead of 100% disability, his brother is suffering from disability of less than 80%, then the amount of deduction will be limited to Rs. 75,000.

(Republished with Amendments)

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  • CLVishwakarma

    Sir, I have two mentally disabled dependent ie wife & daughter with 70% Can I claim for tax benefit for both the person from my income u/s 80DD, if yes how much please explain or any other way to get tax benefit.
    Thankyou

  • Punruthaan Singh

    My Sister is married and she is suffering from blindness.

    Can I be eligible to buy 80DD based premium from authorized company for like LIC for my sister and claim such benefit ?

  • DR.ABHIRAM SINGH

    SIR. My elder unmaried Brother is 60 year old. he has blindness 75% declared by medical board. I am PGTeacher in navodaya vidyalaya. Can I claim for relief U/S 80DD

  • Amit

    i m a govt employee ,my father has undergone bypass surgery on January 2016 .no insurance policy i hve.can i get income tax exemption for aforesaid condition?plz reply sir

  • Narmada

    I am a Govt. employee. My self handicapped with 50% and my is also Handicapped with 85%. Can i get exemption for me and my son also?

  • hardeep Singh

    I am a father of autistic child, i am a salaried person. Please guide me where shall i approach the obtain the certificate and what else i have to produce to obtain tax rebate.

    • DD

      You can obtain certificate from any Doctor/Paediatrician with MD (Neuro) qualification in form I-10A prescribed by Income Tax

  • Ram

    I have a dependent parent for whom i undertake mental illness (Phsychiatry) treatment for a condition called Schizophrenia. Is this covered under this 80DD/80DDB for me to claim exemption? I am spending money for private treatment. what are the formats involved and how do i get the necessary documentation done for this case if exemption is available. would be happy if you can answer this. – Ram.

  • Shubham Srivastav

    Sir, my daughter is suffering from MDR TB and she has been under medical care & treatment of Dr Udwadia of Hinduja Hospital, Mumbai and other local MD soecialist Dr. She has to take daily heavy doses of medicines & injection, which are pretty costly, besides, periodic diagnostics tests & reports. I am a salaried class person working in a ptivate firm. Can I claim deduction under section 80 DD ? pls guide.

    • Rahul Gupta

      If your daughter is suffering from more than 40% disability only then u can claim deduction.

  • Sudhir

    Hi Sir, My Father brother who is 80% disabled and he is my dependent. I’m spending almost a Lakh under his medical treatments. I want to claim this under 80DD is it applicable for me? 4 yrs back my father expired and he is completely dependent on me. Please guide me.

  • Pardeep

    Hello Sir, My Grandfather is dependent on me, and has vision and hearing disability both more than 80% as per CMO certificate. We are HUF, can I claim tax deduction under 80DD?

  • Jacob Ebanezer

    Sir, I have a son with no left hand fingers working. There are literally no fingers or no bones..
    Unfortunately the certificate issued by the CMO Govt Hospital is only 20% Disability, which I honestly believe is not correct.
    Can I avail the tax benefit under 80DD?
    Regards
    JACOB

    • Vijay Kumar

      Dear Mr Jacob,
      In my view also CMO is not correct. Please ensure CMO has followed the medical Guide lines while ascertaining the disability in hand fingers of the child. You may refer to the disability act or other studies conducted by medical societies to grade the disability and approach CMO for second opinion.

  • Shravan

    Sir,my mother in law ( husbands mother) is my dependent.she is a handicapped with 85 percentage disability.she ownly depends on me. Wheather iam eligible to show exemption under 80DD.
    Pls clarify my doubt as soon as possible.
    Thankyou

    From
    Sruthi

    • Vijay Kumar

      No, Dear Sruthi, Your Husband’ mother is not covered as dependant on you under the definition of dependant, it says (b) “dependant” means—
      (i) in the case of an individual, the spouse, children, parents, brothers and sisters of the individual or any of them; Irony is this that you uncles and aunts (Chacha, Tau, mama, mausi) are covered but Saas Sasur( In laws with whom you may be living) are not covered. In my view you can not claim deduction u/s 80DD.

  • Harshavardhan Ashok

    Hi Sir, I have a handicapped dependent who is my Aunt( My Mother’s sister ) who is not married and senior citizen, every month i am transfer some amount for her maintenance and medical aid, Can get exemption for that amount ?? if in case what are documents I need ti submit ??

    • Vijay Kumar

      Dear Ashok,
      Yes mother’s sister can be your dependant according to the definition of dependant person u/s 80DD, so You have to contact your area CMO, take disability certificate by specifying her disability, if you are employed you have to give declaration in writing to your Employer that you have actually spent the amount on her maintenance etc. alongwith certificate of disability.

  • manohara babu

    Hi sir, I have a Severe Hearing impaired 7yrs child & last 3 yrs back we went for cochlear implantaion & I have bills for three thousand in this year. Plz confirm can I claim for 1 lakh exemption under 80DD based on disabled certificate.

    • Vijay Kumar

      Dear babu,
      A person is treated as disable person if he suffering from hearing impairment, means loss of 60 decibels or more in the better ear in the conversational range of frequencies. Please take a disability certificate from CMO of your area district hospital or state Govt hospital and you can claim the benefit of Rs 125k in the AY 2016-17 (Rs 1 lac in AY 2015-16).

  • Mangesh Kharwade

    Sir, I have twin sons, both suffering from Cerebral Palsy. The extent of disability of in case on one is 50% and that in case of another child is 85%. Can I claim deduction for both?

    • Vijay Kumar

      Dear Mangesh, our deepest sympathies are with you as God should not be so cruel to someone as to you. Regarding you question I feel you can claim benefit maximum Rs 125K as word “dependant” is defined to include children, parents etc. I have tried some Income tax filing soft wares , they are not accepting more than 100k for AY 2015-16, so in my view you can claim maximum Rs 125K for one child.

      • Mangesh Kharwade

        Dear Sir,
        Many thanks for response. But the very purpose of allowing the deduction is rehabilitation of disabled dependant. Naturally as the number of dependants increase, expenditure would also increase. This definition is flawed. Where can I make representation, which if heard, would benefit several other people like me?

  • Sushma S

    Sir my father has bipolar condition (psychiatric condition) of about 85% and even more along with traces of Parkinsons. Can i claim this exemption?

    • Vijay Kumar

      Yes, bipolar condition is mental illness as per INDIAN DISABILITY EVALUATION AND ASSESSMENT SCALE (IDEAS) which was
      developed by the Rehabilitation Committee of Indian Psychiatric Society in December 2000. A person suffering from more than 40% mental illness is Treated as person with Disability. You have to take Disability certificate for your father from CMO of your district Hospital with psychiatric facility like IHBAS in Delhi. Doctor will assess the disability and put a % and accordingly you can claim the benefit that is if disability is 40-80% Rs 75k if more than 80% then Rs 125K.

      • Abhishek Kumar

        @disqus_iWCLL4yuK5:disqus Sir, when section 80DD says disability >40% and <80%, so the ones who have 40% disability also lies under 75K benefits?

        • Vijay Kumar

          Dear Abhishek, person with disability as defined by Section 2(t) of PWD act 1995 “Person with disability” means a person suffering from not less than forty per cent. of any disability, as certified by prescribed medical authority so no question of more than 40%. If disability is 40% or more then 75K and if 80% or more then 125k benefit can be taken. Medical authority can be CMO or MD neurology for Autism, cerebral Palsy and multiple disabilities.

  • Rajeev Guglani

    I have a son with severe hearing impairment and is implanted with cochlear implant. Can I claim rebate under 80 DD for my self as well as my HUF in the same year. ?

  • Prashant Gupta

    My wife is a cancer patient & i dont have ant medical insurance policy. I pay every month for his medicines & testing. Her treatment is going in AIIMS, delhi. Can i get deduction on her treatment. If yes then what need to be submit?

    • Tushar Jain

      Brother, you can claim dedication u/s 80ddb of your expenditure subject to maximum of Rs.40000(in case of age less than 60), 60000 in case of senior citizen and 80000 in case of very senior citizen. You just have to enclose a certificate from the medical authority along with your return.
      Take care. 🙂

  • Kamleshkumar Valand

    I have a Disabled persons & my wife is also disabled, but not medical expenses of her, so, I get the benefit in my IT Return? if possible you may advise how can I get this type of benefits.

  • Padmakar Bachhav

    Sir,
    I have claimed benefit under Sec 80dd but my employer has not given me form 16 for the year 2015 – 16 stating that i have not paid any tax

  • Deepak Keshav Deshpande

    sir,
    My is recently having surgery of hip bone fracture and have replaced hip join ball of left leg and also same type of surgery done 1 and 1/2 year before for right leg and not able to to walk he is bed redden completely on bed kindly let me know do i claim benefit Under Section 80DD or Under other section
    Regards
    Deepak Keshav Deshpande
    9870010989

  • Ajay

    Hello Sir,
    I am having a daughter 1 year of age and she is suffering from down’s syndrome. It is a genetic disorder menifest as mental retardation along with other disabilities too. I have gone through your post and 2 acts mantioned by you in your post which just describe

  • Ajay

    Sir can you elaborate on mental retardation

  • Ratheesh Raman

    sir My mother is a person attacked by strokes and one hand and one leg(left side) is not functioning properly . i am buying medicines for her regularly and doing physiotherapy also. Can i claim the same as IT deduction

  • prabhjot

    I have a son who is diagnosed with 50% Mental Retardation. Please let me know what documents do I need to furnish for his maintenance or training expenses for claiming tax benefits

  • Rahul Sharma

    Hi Sir , my question is that we can only claim deduction in case we have a policy or medical treatment for them ? as my sister is mentally retarded but we do not have any policy etc for her , so is there any other way to claim the benefits ?

  • Baiju mani

    Hi , my son is a hemophilic and my wife recently identified have polymyositis. Interested to know the tax benefit which I can claim ,under which category and how much amount. Also what all the certificates supposed to produce. Please reply.

    • sanjay khurana

      I think under 80DDB

  • Vinay Oza

    Sir,
    My daughter dependent on me i am retired bank officer she is mentally challenge(retarded) i have civil surgeon latest certificate should i exempted under any section.

  • Jagan

    Sir, my mother retired prematurely from Government service on grounds of invalidity because of disc prolapse and paraparesis (80% locomotor disability; she cannot walk and is wheel chair bound presently). Subsequently she developed chronic spine abscess and on continuous medical treatment since then. She claims deduction under Section 80U as of present. Since she is predominantly dependent on me financially in view of her lower pension can i claim her medical treatment expenses under Section 80DD if she does not claim it under Section 80U.

  • Anup

    Sir, my wife working in government, my child hospitalised due to low weight(800gm) by birth so that time my total bill was around 200000 , we claimed the same at govt they reimburseed me 150000 so that amount is taxable or not taxable?

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