Income Tax Act provides a deduction under Section 80DD for the medical treatment and insurance costs of a differently abled dependent. Who constitutes a dependent and what is are covered under ‘disabled’ category? What are the eligibility criteria for the deduction and what is the quantum of deduction? What kind of documents will you need to claim the deductions? We have all these answers here.
The term covers spouse, children, parents or siblings. In case of an HUF, any member of the family can be a disabled dependent. But the disabled dependent must fully depend on the taxpayer for support and maintenance to claim deduction.
‘Disability’ is defined by clause (i) of Section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation). Disability also covers the list included the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 (particularly in clauses (a), (c) and (h) of section 2).
According to the tax laws, a person with ‘severe disability’ is a person with 80% or more of the disability/disabilities mentioned in Section 56 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 1996); or
Ones mentioned 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 (44 of 1999).
The list includes the following disabilities whose treatment is eligible for a deduction under Section 80D.
You can claim Rs.75,000 in case of disability between 40% to 80%. During FY1516m this deduction amount was increased from the earlier limit of Rs.50,000.
If you are paying for the medical expenses of a severely disabled dependent, that is, someone with disability higher than 80%, then you can claim a deduction of Rs.1,25,000 in a financial year. Till FY1516, the limit was Rs.1,00,000.
You must produce a medical certificate that authenticates the caretaker and dependent relationship along with specific mention of the disability. This certificate must be certified by a ‘medical authority’. Make sure the medical certificate is updated.
Who is Medical Authority?
Those who are eligible to authenticate the medical certificate include: - Civil Surgeon or Chief Medical Officer of a government-run hospital. - Neurology expert with an MD in Neurology - Paediatric Neurologist with an equivalent degree
To claim deduction under Section 80DD for disabilities like autism, cerebral palsy and multiple disabilities, you will need to submit Form 10IA. The Form also mentions the nature of the disability and if a reassessment is recommended. This Form must be certified and signed by the medical authority.
Who is authorized to certify Form 10-IA? - Civil Surgeon or Chief Medical Officer of a Government run hospital. - Neurology expert with an MD in Neurology - Paediatric Neurologist with an equivalent degree
You must provide a self-declaration certificate on the costs you incurred in the medical treatment of the disabled dependent.
To claim deduction on insurance premium, you must produce the receipts of premium paid. For all other costs of treatment and rehabilitation, the self-declaration certificate should suffice.
No. You can claim the entire deduction amount. You can claim Rs.75,000 in case you are supporting a disabled dependent with 40% disabilities (disabilities included for eligibility of deduction have been mentioned above). If you support a disabled dependent with severe disabilities that is with more than 80% of one or more listed disabilities, then you can claim Rs.1,25,000.
In some cases, the Medical Authority recommends reassessment of the medical condition of the disabled dependent after a particular period of time. In such cases, the Medical Certificate is only valid until a specified date, after which it expires. You must make sure your medical certificate is valid, updated and if necessary reassessed by a Medical Authority before claiming deduction.
Expenses covered include the cost of medical treatment, rehabilitation, training and nursing. Also, if you have been paying the premium of an insurance policy to support the medical costs of the dependent with disabilities, you can claim those premium receipts as well up to Rs.75,000 in case of persons with 40% disabilities and Rs.1,25,000 for dependents with more than 80% of disabilities.
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