Government has specified certain investments and expenses as tax deductible while calculating income tax liability of an individual. Anyone fulfilling these specified criteria can take benefit of tax deductions.
Medical expenses of handicapped depended is one of such expenses which has been allowed as income tax deduction under section 80DD of income tax act for an individual who has spent it on behalf of the handicapped dependent.
However, to claim income tax deduction the individual has to be a resident in India. As the act is silent in foreign citizen and Indian citizen, a resident foreign citizen will also be eligible for income tax deduction under section 80DD of income tax act.
A Hindu Undivided Family can also take benefit of this provision. If any one of the family member is handicapped and the HUF has spent money on medical expenses of such handicapped dependent then it can be allowed as income tax deduction.
Meaning of medical expenses spent for handicapped dependent
To get eligible for section 80DD deduction, medical expenses should have been incurred for the medical treatment of a dependent with disability as specified in rule 11A and as defined under section 2(i) of the person with disability act, 1995.
The amount should have been paid towards medical treatment, training and rehabilitation of a dependent with disability as discussed above.
If you have paid or deposited in a scheme of LIC or with some other insurer for the maintenance of dependent in the event of your death then you will also be eligible for tax deduction.
Meaning of Dependent
Section 80DD can be claimed only when you have spent money for medical expenses of handicapped dependent. If money has been spent for any other person then you cannot claim tax deduction under section 80DD. For this reason, it’s very important to know the meaning of dependent as defined under section 80DD;
For an individual dependent means;
- The spouse
- Brothers and Sisters of the individual or any one of them
who are wholly or mainly dependent upon such individual for support and maintenance.
For a HUF, dependent means any member of the HUF.
If you are a handicapped then tax deduction can be claimed under section 80U of income tax act but not under section 80DD. Section 80DD is specifically applicable to the amount spent on handicapped dependent with disability for their medical treatment.
Quantum of deduction – Section 80DD
Deduction under section 80DD is a fixed deduction. If the disability is less than 80% then a fixed deduction of 50000 rupees is allowed otherwise you can claim 100000 rupees as deduction i.e. for those who has disability of 80% or more.
How to claim Tax deduction U/s 80DD – For medical expenses of handicapped dependent
To claim deduction under section 80DD, you are required to collect a certificate from an approved hospital or institution. If the conditions of disability require reassessment then another certificate as renewal to the old certificate has to be obtained.
As per the present law, you are not required to send the certificate along with your income tax return to claim tax deduction benefit. You have to keep it with yourself after claiming the deduction. If asked in future by IT department then you are required to produce it before the authority.
However, employees are required to submit a copy of the certificate along with their self declaration form while filling with their employer at the year end. Prior to that at the beginning of the year, your employer may ask you for a tax declaration, during that time you are just required to give the amount of your claim against section 80DD.