Circular No. 702-Income tax dated 3-4-1995

Whether, as long as conditions mentioned in section 80DD are ful­filled and assessee has incurred any expenditure on medical treatment, etc., of handicapped person, deduction as envisaged in section 80DD will be allowable in full

1. Under the provisions of section 80DD of the Income-tax Act, 1961, an assessee who is resident in India being an individual or a Hindu undivided family is allowed a deduction of Rs. 15,000 for expenditure incurred in respect of handicapped dependants subject to the following conditions :—

     (i)   the handicapped dependant is a relative of the assessee and is not dependant on any person other than the assessee for his support or maintenance;

   (ii)   he is suffering from a permanent physical disability (including blindness) or mental retardation and the same is certified by a Physician, Psychiatrist, etc., working in Govern­ment hospital;

  (iii)   the disability has the effect of reducing consid­erably such person’s capacity for normal work or engaging in a gainful employment or occupation;

   (iv)   the assessee has incurred any expenditure for medical treatment (including nursing), training and rehabilitation of the handicapped dependant.

2. The Board has received several representations seeking clari­fication regarding the quantum of deduction available in relation to the expenditure incurred on the handicapped dependants.

3. It is hereby clarified that the deduction under section 80DD of the Income-tax Act, 1961 is statutory in nature. Therefore, as long as the conditions mentioned in the section are fulfilled, and the assessee has incurred any expenditure on medical treat­ment, etc., of the handicapped person, the deduction as envisaged in the section will be allowable in full.

Circular : No. 702, dated 3-4-1995.