taxguru.

in
http://taxguru.in/income-tax/deduction-us-80dd-in-respect-of-expenses-incurred-on-maintenance-medical-treatment-of-a-disableddependant.html

Section 80DD Deduction- Medical expense of disabled

dependent
Admin

CA Sandeep Kanoi
Deduction u/s. 80DD for expenses on maintenance/ medical treatment of disabled
dependent
In Past few years cost of medical treatment has shoot up very sharply and has made medical
treatment almost out of reach of Lower and Middle class families in India. Government of India has
in order to provide some relief to those who have a dependent with disability or sever disability
provided some reliefs from Income tax under section 80DD of the Income Tax Act, 1961.
Who is eligible to claim deduction?
Individual or a Hindu undivided family, who is a resident in India.
Deduction u/s 80DD is not available to non-resident Indian (NRI).
What Expenses are eligible for deduction?
Expenditure for the medical treatment (including nursing), training and
rehabilitation of a disabled dependent.
Money paid to Life Insurance Corporation (LIC), Unit Trust of India or any
other insurer for the purpose of buying specified scheme or insurance for the
purpose of maintenance of such dependant.
Definition of relative: Who can be your disabled dependant?
For individuals, your spouse, son / daughter (any child), parents and brother / sister (siblings) can be your
handicapped dependants.
For HUFs, any member of the HUF can be a disabled dependant.
The disabled person should be wholly or mainly dependant on you for his / her support and maintenance, and
should not have claimed deduction under section 80U.
Some considerations for the insurance premium
Not all schemes qualify there are specific schemes meant for this purpose. The policy has to insure your life.
i.e. it should be in your name.
Premium is required to be paid on annual basis or a lump sum amount for the benefit of the disabled
dependant.
Nomination of Policy should be in the name of (a) your disabled dependant, or (b) any other person or trust that
would receive the money for the benefit of your disabled dependant
Policies in which one can invest

1/5

 Life Insurance Corporation of India offers Jeevan Vishwas policy for the
benefits of parents or guardian of person with physical disabilities which
qualify for tax benefit under Section 80DD.
This policy ensure that the dependant person with physical handicap does
not have to depend on anybody for financial support in case something
happens to his parent or guardian. Jeevan Vishwas is a policy which
participates in profits.
Under this insurance policey, the life of the person, on whom the
handicapped person is dependant, is insured. In case the dependant dies before the guardian/parent, the
parent/guardian will have the option to either keep the policy for a reduced paid-up sum assured or entitled to
receive the refund of premiums paid.
However if the parent/guardian dies before the dependant, 20% of the lump sum assured becomes payable for
the benefit of the dependant. Moreover the balance is paid by way of monthly annuity for 15 years for sure and
thereafter for life on the life of dependant.
The health insurance cover provided by National Trust needs special mention. The trust has introduced
Niramaya health Insurance Scheme for persons with disabilities like Autism, Cerebral Palsy and Mental
Retardation etc. Under this scheme, for those who have family income of less than Rs. 15,000 per month, you
need to make a payment of Rs. 250 per year. For the person having family income of more than Rs. 15,000 per
month is required to pay an amount of Rs.500 per year. For the families which are Below Poverty Line (BPL) this
scheme is free, provided the applicant holds the BPL card. This scheme covers health expenses up to a limit of
Rs. 100,000 per year for the person suffering from these disabilities. The scheme is administered by National
Trust in collaboration with ICICI Lombard. Under this scheme even existing disease are covered without any
medical check up. Moreover this plan covers routine expenses like medical check up, transportation and
corrective surgery etc. which are not covered under regular health insurance products.
What is considered as disability and Severe Disability?
Disability would be as defined under clause (i) of section 2 by the Persons with Disabilities (Equal
Opportunities, Protection of Rights and Full Participation) Act, 1995 and will also include disabilities referred to
in clauses (a), (c) and (h) of section 2 of National Trust for welfare of Person with Autism, Cerebral Palsy, Mental
Retardation and Multiple Disabilities Act, 1999.
It includes the following:
Blindness
Low vision
Leprosy-cured
Hearing impairment
Locomotor disability
Mental retardation
Mental illness
Autism
Cerebral palsy
Multiple disabilities

2/5

A person with disability means a person suffering from not less than 40% of any of the above disabilities.
Severe disability means 80% or more of one or more of the above disabilities.
Other Conditions to claim deduction
For claiming the deduction in respect of the above, you have to furnish a medical certificate of disability from a
Government Hospital certifying the disability of the dependant. The certificate needs to be renewed periodically.
For people having Autism, Cerebral Palsy or multiple disabilities, form number 10-IA needs to be filled up. There
are two other formats for person suffering from mental illnesses and all other disabilities.
People have to furnish self declaration certifying the expenditure incurred on account of medical treatment
(including nursing), training and rehabilitation of the handicapped dependant.
You do not have to preserve the actual receipts for expenses incurred. However you will have to produce the
actual receipts in case you claim deduction in respect of payment made to LIC, UTI etc for the purpose of buying
insurance or other schemes for maintenance of such dependant.
Who can issue medical certificate of disability?
Neurologist having a degree of Doctor of Medicine (MD) in Neurology (or, in case of children, a Pediatric
Neurologist having an equivalent degree)
A Civil Surgeon or Chief Medical Officer (CMO) of a government hospital
Taxability of Premium Amount Paid in Case disable dependant dies before the taxpayer:- In case your
disabled dependant predeceases you (that is, dies before you); the amount in the policy is returned to you. This
would be treated as your income for the year in which you receive it, and would be fully taxable in your hands.
Amount of Deduction and Tax Saving
The deduction allowed is Rs. 50,000 if disabled dependant is not suffering from severe disability. Limit is
Raised to Rs. 75,000/- from A.Y. 2016-17.
Deduction allowed goes up to Rs. 1,00,000 if disabled dependant is a person with severe disability.Limit
is Raised to Rs. 1,25,000/- from A.Y. 2016-17.
Deduction not depend on amount of expenses incurred:- Even if your actual expenses on above
mentioned disabled dependent relative is less then amount mentioned above you will be eligible to full
deduction.
Please Note
a) Individuals would need to produce a copy of the disability certificate as issued by the central or state
government medical board to claim deduction.
b) Insurance policy obtained must be in your name and should be a policy for life. It could pay either an annuity
or a lump sum amount for the benefit of the dependent on your death.
c) If the disabled dependent predeceases you, the policy amount is returned to you, and treated as income for
the year in which you receive it, thus fully taxable in your hands.
Conclusion:- The physical and mental agony experienced by the parents/ guardian of such dependants cannot
be taken away but Government of India, National Trust, LIC and other charitable institutions are doing
commendable job by reducing the financial agony of such families. It is important for all of us to look for such
benefits available and talk these about in various media to take it across as many people as possible. This is a
bit of social work which can give relief to handicapped persons and their parents.

3/5

Frequently Asked Questions

Question I am a salaried person who had a son with hearing impairment. My son underwent an
operation for cochlear implantation and I spent around Rs 6 lakh for it. Can I get any tax benefit for the
treatment expenses?
Answer:- Section 80DD allows a deduction to an individual or HUF if the person has incurred in the previous
year any expenditure on medical treatment (including nursing), training and rehabilitation of a dependant with a
disability or paid or deposited any amount under a scheme framed in this behalf by an insurer for the
maintenance of a dependant with a disability.
A person with a disability is one suffering from not less than 40 per cent of a disability (as certified by a medical
authority working in a hospital or institution notified by the Government), which could be blindness, low vision,
leprosy cured, hearing impairment, locomotor disability, mental retardation, mental illness.
Hearing impairment, for this purpose, means a loss of 60 decibels or more in the better ear in the conversational
range of frequencies.
A person with disability also includes the one suffering from autism, cerebral palsy, mental retardation or a
combination of any two or more. Section 80DD allows a deduction of up to Rs 75,000 a year and if the disability
is severe, up to Rs 1,25,000 a year. Severe disability means a person with 80 per cent or more of the disability.
You can claim deduction if your fits into these categories.
Question:- My father is a pensioner and his pension is less than my salary. My sister is a disabled
dependant with 85% disability. She is dependant on me. Can I get rebate under section 80DD? My
Assessing Officer says that your father is alive and is getting pension; so you cannot claim deduction. Is
it true?
Answer:- Your Assessing Officer is not correct. The deduction u/s 80DD is for dependant of an individual tax
payer and dependant includes brother and sister of Individual. You can furnish to Your Assessing officer an
undertaking from your father that your sister is dependant on you and not on your father.
Question:- I have a handicapped dependant who is my cousin ( Daughter of my mothers sister). She is
completely dependant on me and every month I spend Rs 10,000. She is suffering from 85 % Blindness
and mental problem. I wanted to know whether I can claim tax benefit under 80DD?
Answer U/s. 80DD dependant means in the case of an individual, the spouse, children, parents, brothers and
sisters of the individual or any of them;
It is clear that section 80DD is applicable only if the person on whom you are spending are any one of following
your wife or husband
your children
your parents
your brother
your sister
your wifes or husbands brother or sister
your parents brother or sister
The Daughter of your mothers sister is, clearly, not coming under the definition of dependant for the purpose of
claim of deduction u/s 80DD. So, you can not claim deduction u/s. 80DD in respect of expenses incurred for her
maintenance and medical treatment.
Question Brother of Mr. Raja (a resident) is totally blind and is dependent on Mr. Raja. During the Assessment
year 2016-17, Mr. Raja has incurred expenditure of Rs. 10,000 on training and rehabilitation of his brother. Can

4/5

Mr. Raja claim any deduction in respect of expenditure incurred by him on maintenance of his physically
handicapped brother?
Answer- In this case, all the criteria of section 80DD are satisfied and hence, Mr. Raja can claim a flat deduction
of Rs. 1,25,000 under section 80DD (since his brother is suffering from 100% disability).
Suppose in the above case, instead of 100% disability, his brother is suffering from disability of less than 80%,
then the amount of deduction will be limited to Rs. 75,000.
(Republished with Amendments)

5/5