Everything you need to know about Section 80DD deductions
What's the story
Section 80DD of the Income Tax Act in India enables taxpayers to claim deductions for the medical treatment and care of disabled dependents. This provision is intended to alleviate the financial burden on individuals with a disabled spouse, children, parents, or siblings dependent on them. The deduction encompasses expenses incurred for medical treatment, nursing, rehabilitation, and even the purchase of specific equipment prescribed for the disabled person.
Eligibility
Eligibility criteria explained
The taxpayer has to be a resident individual or Hindu Undivided Family to claim the deduction under Section 80DD. The dependent should not have claimed any deduction for their disability under any other sections of the Income Tax Act. The disability of the dependent should be certified by a medical authority as per government guidelines, with a disability level of at least 40%.
Deduction limit
Deduction amount details
The quantum of deduction under Section 80DD is determined based on the severity of the disability. For disabilities with 40% to 79% impairment, a fixed deduction of ₹75,000 is permitted, irrespective of the actual expenses incurred. For severe disability (80% and above impairment), the limit is enhanced to ₹1,25,000 per annum.
Documentation
Necessary documentation
Taxpayers are required to provide a copy of the certificate issued by a medical authority with their tax return in order to claim this deduction. This certificate should clearly mention the disability percentage. And, if you are claiming deductions for expenses incurred on treatments or purchase of specific equipment, maintaining receipts and other relevant documents is essential for verification.
Maximizing benefits
Tips for maximizing benefits
To maximize your Section 80DD deductions, maintain comprehensive records and receipts detailing your dependent's treatment and care expenses. Regularly update these records to reflect current costs. Renew your dependent's disability certificate as needed. Remember, these certificates come with expiration dates. Engage tax professionals if you're uncertain about navigating this deduction or if your dependent's complex care needs potentially impact your eligibility or deductible amount.