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Introduction:

Residents, whether individuals or Hindu Undivided Families (HUFs), are entitled to deductions under Section 80DD of the Tax Act for totally dependent disabled caregivers if they will be supported and cared for.

Families of disabled dependents can avail tax benefits under section 80DD for personal maintenance. Both self-employed and Hindu Undivided Families (HUFs) are eligible for this claim.

Section 80DD:

Section 80DD of income tax provides flat tax deductions for caregivers of disabled people, irrespective of expenses. This policy acknowledges the high cost of medical care, which often poses challenges for many Indian families.

Families of disabled carers can claim a deduction under 80DD for the cost of their care. It is important that deductions are available for families, not just dependents.

 Eligibility for Section 80DD:

For a person to claim deduction under section 80DD if he has a dependent with disability

• parents,
• spouse,
• siblings,
•  children,
• if he belongs to a Hindu unified family (HUF) with a family member disabled
• However, Non Resident Indians (NRIs) are not eligible to claim deduction.

Disabilities Under 80DD:

Here is the list of disabilities mentioned under 80DD. Taxpayers can claim a deduction for this disability dependents

• Locomotor disabilities
• Mental retardation
• Blindness and impaired vision
• Leprosy-cured
• Hearing disability
• Mental disability

 Conditions for Section 80DD Deduction :

To qualify for this deduction, you must meet the following requirements.

• Only resident Indian citizens are eligible to claim the deduction.
• For a single taxpayer, the term “dependent” includes the taxpayer’s spouse, children, parents, brothers and sisters. In the case of a Hindu undivided family (HUF), it means a member of the HUF.
• To qualify for the tax deduction, the dependent must have at least a 40% disability.
• The taxpayer has covered the maintenance, training and rehabilitation costs (including medical expenses) of the sponsor, or may have contributed to a rehabilitation program with LIC or another insurance company.
• If the dependent has already claimed a personal deduction under section 80U, the taxpayer is not eligible for this deduction.

Deduction Amount under  Section 80DD:

This category offers standard deductions regardless of age or expenses as

• The deduction from gross income for general disability (defined as at least 40%) is ₹75,000.
• The maximum deduction for gross income (GTI) for severe disability (i.e. 80% or more) is ₹1,25,000.

Required documents for 80DD:

• The person claiming the deduction should follow the authorized procedure along with his Income Tax Return (ITR) and submit a copy of the certificate issued by the medical professional in the required Form 10-IA . . . . It is advisable to keep these documents handy as there are hardly any other documents attached to the ITR.
• A medical certificate of a licensed doctor is required in order to claim deduction under Section 80DD.
• A deduction under 80DD requires a medical certificate from a licensed doctor, such as a Doctor of Medicine (MD) specializing in neurology or neurosurgery, a pediatric neuropathologist with a degree equivalent to that of a neuropathologist, or a Chief Medical Officer (CMO) from any government institution or a Civil Surgeon.
• People must also provide a self-signed declaration establishing medical expenses for caregivers with disabilities, including medical, rehabilitation and training expenses

Benefits of Section 80DD:

• Individuals and HUFs are entitled to claim all deductions allowed under this section, irrespective of expenses incurred for the care of the dependent or premiums paid for insurance.
• No documentation relating to costs is required. However, you will need to provide a medical certificate from a licensed physician stating that you have suffered a covered disability in accordance with government regulations

Conclusion:

Many Indian families will undoubtedly benefit immensely from Section 80DD in managing their medical expenses. Recent research has notably raised the maximum deductible limit, reflecting the expansion of the medical profession and the increasing challenges families face