Section 80DD Deductions- Eligibility & Documents Required for Claim Process

The rate of medical inflation has been increasing since the last few decades. A constant rise in treatment costs makes it difficult to fund medical expenses from your hard-earned money. It can get even more challenging to manage your finances and the treatment costs when you have a person with special needs at home. Hence, the Income Tax Act of 1961 allows certain deductions for payments associated with the maintenance of a person, who is classified as a disabled individual.

Eligibility of Section 80DD

The deduction under section 80DD of the Income Tax Act can be claimed not only by an individual, but also any Hindu Undivided Family (HUF) caretaker paying for it. This deduction under Section 80DD of Income Tax Act is not available to foreign national or NRIs, as the governments in those countries have several programs for medical treatments. *

Which Expenses are Deductible Under Section 80DD of Income Tax Act?

The following expenses are allowable as a deduction in your return of income, helping to lower the overall tax liability:

1. The payments related to medical treatment, including nursing, training, and any rehabilitation that may be required.
2. Any payment made to a scheme framed by life insurance companies for insuring the health of such individuals (subject to conditions specified in the policy).

Note: Please note that tax benefit is subject to change in tax laws.

Which Ailments are Classified As Disability Under Section 80DD?

Ailments that are defined as per section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 and clause (a), (c) and (h) of section 2 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 are considered as a disability under section 80DD. These ailments include autism, cerebral palsy, and multiple disabilities in its purview. *Note: Please note that tax benefit is subject to change in tax laws.

How Much Deduction is Available Under Section 80DD?

Section 80DD deduction allows a flat deduction of ₹75,000 when the expenses are for an individual with 40% or more disability. The same deductions increase to ₹1,25,000 for a case of 80% or more disability, which is also termed as severe disability. * Note: Please note that tax benefit is subject to change in tax laws.

What are the Documents to be Produced to Claim the Benefits of Section 80DD?

The entire amount of deduction can be claimed by the individuals and HUF irrespective of the actual medical expenses. To claim a deduction under section 80DD, no specific documents need to be furnished, but a medical certificate authenticating the disability by a medical professional is required. * *Standard T&C Apply Note: Please note that tax benefit is subject to change in tax laws.

The Bottom Line

While section 80DD provides for a deduction in your income tax return, you can also purchase health insurance plans that are specifically designed to help cover the medical expenses. These may include critical illness plans or even health insurance for senior citizens . These health insurance plans also provide medical coverage for the already soaring treatment costs. In addition, the premiums paid for these plans are deductible under section 80D subject to prevalent limits. Thus, you can get dual benefits from purchasing a health cover. Before you finalise on any plan, make sure to understand what is health insurance and how it can benefit you by safeguarding your finances while the right treatment is made available for the insured individual. *Standard T&C Apply Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.