October 28, 2020

Itax Software

Income Tax Software

Automated All in One TDS on Salary for Govt & Non-Govt Employees for F.Y.2017-18 With Section 80DD – Deduction on medical expenses of disabled

If you have a dependent person in your family who is suffering from a disability, then you can avail tax benefit under section 80DD. This deduction is offered to help you take care of your disabled family member who is dependent on you.
If the individual himself is suffering from a disability, then he can claim tax benefits under section 80U.

Eligibility for deduction under section 80DD

Any individual or HUF (Hindu Undivided Family) who is a Resident of India is eligible to claim this deduction.
This tax deduction is not available to NRIs (Non-Resident Individual).

Who is a disabled dependent under section 80DD?

  • For individuals, a disabled dependent can be a spouse, son/daughter (any child), parents, brother/sister (siblings).
  • For HUFs, a disabled dependent can be any member of the HUF.
The disabled person should be dependent on the person claiming the deduction. The disabled person should not have claimed deduction under section 80U.

What expenses are eligible for deduction under section 80DD?

  • Any expenditure made towards medical treatment, nursing, training, rehabilitation of a dependent person with the disability.
  • Any amount paid a premium for a specific insurance policy designed for such cases. The policy must satisfy the conditions mentioned in the law.
  • If the disabled dependent predeceases the person claiming deduction under this section, then an amount equal to the amount of premium paid shall be considered to be the income of the claimer for the previous year (i.e., the year in which such amount is received by the claimer/assessee) and shall be chargeable to tax.

Deduction amount

Deduction allowed varies depending on whether the dependent person has a disability or severe disability.

A) Dependent person with disability

If the dependent person has at least 40% of any of the specified disability, then he is considered a person with the disability.
Hence, the individual taking care of the medical expenses of the dependent person with the disability can get the tax deduction of Rs. 75,000.

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B) Dependent person with severe disability

If the dependent person has at least 80% of any disability, then he is considered a person with severe disability.
Hence, the individual taking care of the medical expenses of a dependent person with a severe disability can get the tax deduction of Rs. 1,25,000.
          Table Showing Tax Deduction under section 80DD
Amount (in Rupees)
A dependent person with disability
Rs. 75,000
A dependent person with severe disability
Rs. 1,25,000

Disabilities covered under section 80DD

The following disabilities are covered under section 80DD of the Income Tax Act, 1961:
  • Blindness
  • Low vision
  • Leprosy-cured
  • Locomotor disability
  • Hearing impairment
  • Mental retardation
  • Mental illness
  • Autism
  • Cerebral palsy

Who can certify a person as a disabled person?

The following kinds of medical authorities can certify a person to be disabled:
  • A Civil Surgeon or Chief Medical Officer (CMO) of a government hospital
  • A Neurologist with an MD in Neurology
  • In case of children, a Paediatric Neurologist having an equivalent degree

Documents Required to Claim Deduction under section 80DD?

The section 80DD deals with providing tax deductions to individuals and/or HUFs for caring for a disabled dependent. You will require the following documents to claim tax benefits of section 80DD.

Medical Certificate:

You will be required to produce/submit a medical certificate authenticating the disability of your dependent from a certified medical authority as defined by the law.

Form 10-IA:

In case your disabled dependant is suffering from Autism, Cerebral Palsy or multiple disabilities, you will need to produce form number 10-IA.

Self-declaration certificate:

You also need to furnish a self-declaration certificate stating the expenses incurred by you on your handicapped dependent for his medical treatment (including nursing), training and rehabilitation.

Receipts of Insurance Premium Paid:

Since self-declaration certificate is enough for claiming most expenses, you do not need to keep actual receipts of those expenses. However, if you want to claim any deduction payment towards any insurance policies taken for a disabled dependent, then you need actual receipts of expenses.

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