Raising the limit of deduction under section 80DD for persons with disability and severe disability

The existing provisions of section 80DD, inter alia, provide for a deduction to an individual or HUF, who is a resident in India, who has incurred—

a) Expenditure for the medical treatment (including nursing), training and rehabilitation of a dependant, being a person with disability as defined under the said section; or

b) paid any amount to LIC or any other insurer in respect of a scheme for the maintenance of a disabled dependant.

The section presently provides for a deduction of fifty thousand rupees if the dependant is suffering from disability and one lakh rupees if the dependant is suffering from severe disability (as defined under the said section).

The limits under section 80DD in respect of a person with disability were fixed at fifty thousand rupees by Finance Act, 2003. Further, the limit under section 80DD  in respect of a person with severe disability was last enhanced from seventy five thousand rupees to one lakh rupees by Finance (No.2) Act, 2009.

In view of the rising cost of medical care and special needs of a disabled person, it is proposed to amend section 80DD so as to raise the limit of deduction in respect of a person with disability from fifty thousand rupees to seventy five thousand rupees.

It is further proposed to amend the section so as to raise the limit of deduction in respect of a person with severe disability from one lakh rupees to one hundred and twenty five thousand rupees.

These amendments will take effect from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016-17 and subsequent assessment years.

[Clauses 19 & 23]

NOTE ON RELEVANT CLAUSES  OF FINANCE BILL 2015

Clause 19 of the Bill seeks to amend section 80DD of the Income-tax Act relating to deduction in respect of maintenance including medical treatment of a dependant who is a person with disability.

The existing provisions of section 80DD, inter alia, provide for a deduction to an individual or HUF, who is a resident in India, who has incurred only (a) expenditure for the medical treatment (including nursing), training and rehabilitation of a dependant, being a person with disability; or (b) any amount paid to LIC or any other insurer in respect of a scheme for the maintenance of a disabled dependant.

The aforesaid section provides for a deduction of fifty thousand rupees if the dependant is suffering from disability and one lakh rupees if the dependant is suffering from severe disability.

It is proposed to amend said section so as to raise the limit of deduction in respect of a dependant with disability from fifty thousand rupees to seventy-five thousand rupees.

It is further proposed to amend the said section so as to raise the limit of deduction in respect of a dependant with severe disability from one lakh rupees to one hundred and twenty-five thousand rupees.

These amendments will take effect from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016- 17 and subsequent assessment years.

EXTRACT OF RELEVANT CLAUSES FROM FINANCE BILL 2015

19. Amendment of section 80DD.

In section 80DD of the Income-tax Act, with effect from the 1st day of April, 2016, for sub-section (1), the following sub-section shall be substituted, namely:—

“(1) 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.”.

( Compiled by Taxguru Team)

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0 responses to “Budget 2015- Section 80DD deduction Limit Raised”

  1. Shekhar says:

    Dear sir, my son has autism and we spend 3.5 lac rs on his schooling per annum.half of which i.pay and rest my wife. Can both of us claim rebate under this section

  2. Yogeesh.K.S. says:

    My brother is Hearing impaired and its more than 100%. I am a govt. employee. How can i claim income tax benefits under this section? and what shall i do to claim?

  3. S S Gangopadhyay says:

    My son is physically handicapped ( both upper limb & both lower limb) due to congenital deformity. The percentage of disability is 40 %. Am I eligible for Rs. 50000/- deduction u/s 80 DD

  4. murahari says:

    What is the income limit of ason tobe considered as dependent

  5. Abhishek Gautam says:

    My Father is partially Hadicapped (Left hand Amputed because of an Accident) and he completely dependent on me.

    Can I claim exemption under Income Tax. and what are the expenses covered. Also what are documents which needs to be submitted to my organisation for exemption claim

  6. Chetan says:

    I am govt. employee and I am physically handicapped. Do I get benefit of this section i.e. IT RELIEF u/s 80DD. It is necessary to do expense to get benefit of this section or without expenses ?

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