Deduction in respect of maintenance including medical treatment of a handicapped dependent relative - Section 80DD - Income Tax - Ready Reckoner - Income Tax

Deduction in respect of maintenance including medical treatment of a handicapped dependent relative - Section 80DD Who is eligible for Deduction This section provides deduction to an individual or HUF , who is a resident in India and has incurred expenditure incurred for the medical treatment (including nursing), training and rehabilitation of a dependent, being a person with disability as defined under the said section or any amount paid or deposit under scheme framed in this behalf by LIC or any other insurer or Administrator or the specified Company referred u/s 2(h) of the Unit Trust of India in respect of a scheme for the maintenance of a disabled dependent. [ Section 80D(1) ] The deduction of section 80D(1)(b) shall be allowed only if the following conditions are fulfilled, namely:- (a) the scheme referred to in section 80D(1)(b) provides for payment of annuity or lump sum amount for the benefit of a dependant, being a person with disability,- (i) in the event of the death of the individual or the member of the HUF in whose name subscription to the scheme has been made; or (ii) on attaining the age of 60 years or more by such individual or the member of the HUF, and the payment or deposit to such scheme has been discontinued. ( b ) the assessee nominates either the dependant, being a person with disability, or any other person or a trust to receive the payment on his behalf, for the benefit of the dependant, being a person with disability. [ Section 80D(2) ] Dependent means spouse, children, parents, brothers and sisters of the taxpayer. In case of HUF, any member of the HUF can be a disabled dependent. Disability shall have the meaning assigned to it in clause ( i ) of section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 and includes autism , cerebral palsy and multiple disability referred to in clauses ( a ), ( c ) and ( h ) of section 2 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 . Amount of Deduction The amount deductible is a fixed deduction of 75,000 . Condition The minimum degree of disability should be 40% or more in order to be eligible for any concessions/benefits. A higher deduction of 1,25,000 in case of severe disability. Condition ( i ) a person with 80% or more of one or more disabilities, as referred to in section 56(4) of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995; or ( ii ) a person with severe disability referred to in clause ( o ) of section 2 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999; Deemed Income If the dependant , being a person with disability, predeceases the individual or the member of the HUF referred to in section 80D(2), an amount equal to the amount paid or deposited under section 80D(1)(b) shall be deemed to be the income of the assessee of the previous year in which such amount is received by the assessee and shall accordingly be chargeable to tax as the income of that previous year. [ Section 80D(3) ] Exception The provisions of section 80D(3) shall not apply to the amount received by the dependant , being a person with disability, before his death, by way of annuity or lump sum by application of the condition referred to in section 80D(2)(a)(ii). [ Section 80D(3A) ] Other Conditions The taxpayer cannot claim this deduction if the dependent has already claimed deduction under Section 80U for himself or herself. The disabilities which qualify for tax benefits under Section 80DD of the Income Tax Act include blindness, loco motor disability, low vision, mental illness, mental retardation, leprosy-cured, hearing impairment, cerebral palsy and autism. For the purposes of section 80DD(4), the assessee shall furnish along with the return of income, a copy of the certificate issued by the medical authority, in Form No. 10-IA, where the person with disability or severe disability is suffering from autism, cerebral palsy or multiple disability. [ Rule 11A(2) ] Under this section deduction will be reversed, If handicapped dependent relative received annuity before the death of assessee or before attaining the age of 60 years of assessee. [w.e.f. AY 2023-24]. Following Additional details of deduction in respect of maintenance including medical treatment of a dependent who is a person with disability to be furnished at the time of filling ITR. [ w.e.f. 01/04/2024 Notification No. 22/2024 dated 21.02.2024 ]