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TMI BlogSupportive Tax Provisions for Individuals and HUFs Caring for Disabled Dependents persons : Clause 127 of the Income Tax Bill, 2025 Vs. Section 80DD of the Income Tax Act, 1961X X X X Extracts X X X X X X X X Extracts X X X X ..... h disabilities. These provisions reflect a legislative intent to provide financial relief and support to individuals and Hindu Undivided Families (HUFs) aiding dependents with disabilities. The provisions are particularly significant given the financial burdens often associated with the care and rehabilitation of individuals with disabilities. This commentary will provide a detailed analysis of Clause 127 and Section 80DD, exploring their objectives, implications, and differences. Objective and Purpose Both Clause 127 and Section 80DD aim to alleviate the financial strain on taxpayers who support dependents with disabilities. The provisions recognize the additional costs associated with medical treatment, nursing, training, and rehabilita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to tax. 5. Documentation and Compliance: Taxpayers must furnish a medical certificate to claim the deduction. The certificate must be renewed if it stipulates a reassessment period for the disability. 6. Exclusions: A dependent claiming a deduction u/s 154 is excluded from the definition of "dependant" under this section. Key Provisions of Section 80DD of the Income-tax Act 1961 1. Eligibility and Deduction Limits: Similar to Clause 127, Section 80DD provides a deduction of seventy-five thousand rupees for expenses related to the medical treatment and maintenance of a dependent with a disability. For severe disabilities, the deduction increases to one lakh and twenty-five thousand rupees. 2. Conditions for Scheme-Based Deductions: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing deductions u/s 154, while Section 80DD excludes those claiming u/s 80U. This reflects differences in the scope and application of these sections. Practical Implications Both provisions have significant implications for taxpayers supporting dependents with disabilities. They provide financial relief and recognize the additional burdens faced by these taxpayers. Compliance with documentation requirements is crucial to claim deductions, and taxpayers must be aware of the conditions and exclusions applicable under each provision. The provisions also impact insurers and scheme administrators, who must ensure their products comply with legislative requirements to qualify for deductions. Additionally, the provisions influence policy discussi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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