article Income Tax

Deduction 80DD A Y 2021-22

Team Freetaxguru

Deduction 80DD A Y 2021-22

According to Income Tax Act 1961 Section 80DD is for treatment of a dependent in respect of disability.

 Deduction in respect of maintenance including medical treatment of a dependent who is person with disability (Section 80DD)

Essential condition for claiming deduction under this section

  1. Deduction is available to a person who is:
  • Resident in India, and
  • Is either an individual or a HUF
  1. Deduction is available if the assessee has during the previous year:
  • Incurred any expenditure for the medical treatment (Including nursing), training and rehabilitation of a dependent, being a person with disability; or,
  • Paid or deposited any amount, under any scheme framed by the LIC or any other insurer or UTI and which is approved by the CBDT. The scheme should provide from the payment of annuity or a lump sum amount for the benefit of dependent being a person with disability in the event of the death of the individual or the member of the HUF, in whose name subscription to the scheme has been made by the HUF for the benefit of the handicapped member. The assessee must nominate either the dependent being a person with disability or any other person or a trust to receive the payment on his behalf for the benefit of the dependent being a person with disability.
  1. The assessee, claiming a deduction under this section, shall furnish a copy of the certificate issued by the medical authority in the form no. 10-IA and in the prescribed manner, along with the return of income under section 139 in respect of the assessment year for which deduction in claimed. Further where the condition of disability requires reassessment of its extent after a period stipulated in the aforesaid certificate, no deduction under this section shall be allowed for any assessment year relating to any previous year beginning after the expiry of the previous years during which the aforesaid certificate of disability had expired, unless a new certificate is obtained form the medical authority in the form and manner, as may be prescribed, and a copy thereof is furnished along with the return of income.

Quantum of deduction

Rs. 75,000 form his gross total income, irrespective of actual expenditure incurred/amount deposited.

 

Rs. 1,25,000, where such dependent is a person with serve disability.

Consequences if the dependent being a person with disability predeceases the individual or the member of the HUF (Section 80DD (3): If the dependent being a person with disability predecease the individual or the member of the HUF in whose name money has been deposited, an amount equal to the amount paid or deposited under the scheme shall be deemed to be the income of the assessee of the previous year in which such amount is received by the assessee and shall accordingly be chargeable to tax as the income of that previous year.

 Deduction in respect of medical treatment, etc (Section 80DDB and Rule 11DD)

Essential conditions for claiming deduction under this section

  1. Deduction is available to a person who is-
  • Resident in India, and
  • Is either an individual of HUF
  1. Deduction is allowed in respect of any expenditure actually incurred for the medical treatment of the following persons for such disease or ailment as may be specified in the rules made in this behalf by the board:

In the case of individual       –           For himself or a dependent

In the case of HUF                –           For any member of the HUF

  1. No such deduction shall be allowed unless the assessee obtains the prescription for such medical treatment from a neurologist, an oncologist, a urologist, a hematologist, an immunologist or such other specialist, as may be prescribed (First proviso to section 80DDB)

Quantum of deduction: Amount actually paid or Rs. 40,000 whichever is less. If the person for whom such expenditure is incurred happens to be a senior citizen, the maximum deduction shall be allowed for a sum of Rs. 100,000 instead of Rs. 40,000. in other words, the deduction in this case shall be actual amount incurred or Rs. 1,00,000 whichever is less.

Further, if any amount is received under an insurance from the insurer of reimbursed by an employer for the medical treatment of the person mentioned in point (2) above, the amount so received shall be reduced from the deduction allowable under this section.

Specified disease and ailments under section 80DDB Rule 11DD: Specified disease and ailments shall be as under: –

  1. Neurological diseases i.e. (a) Dementia, (b) Dystonia musculorum deformans, (c) Motor neuron disease, (d) Ataxia, (e) Chorea, (f) Hemiballismus, (g) Aphasia, (h) Parkinson’s disease.

These   diseases shall be treated as chronic and protracted, if the disability has been certified to be 40% and above.

  1. Malignant cancer;
  • Full blown acquired immune-deficiency syndrome (AIDS)
  1. Chronic renal failure;
  2. Hemophilia;