The Income Tax Act, 1961 offers tax deductions to taxpayers under Section 80C to 80U if they make certain investments from their total taxable salary. Income tax deduction under Section 80DD of the Income Tax Act is allowed to Resident Individuals or HUFs for a dependent who is differently abled and is wholly dependent on the individual (or HUF) for support & maintenance.
Conditions to avail deductions under Section 80DD
- This deduction is available for a dependent only and not the taxpayer himself.
- The taxpayer cannot claim this deduction if the dependent has already claimed a deduction under Section 80U for themselves.
- By dependent of a taxpayer, it means spouse, children, parents, brothers & sisters of the taxpayer. For HUF, it means a member of the HUF.
- The taxpayer has incurred expenses for medical treatment (including nursing), training & rehabilitation of the differently abled dependent or the taxpayer made deposits in schemes from LIC or other insurers for the dependent.
- The disability of the dependent is not less than 40%.
- The disability of the dependent is as defined under section 2(i) of the Persons of Disabilities Act, 1995.
Amount of Deductions Allowed under Section 80DD
If the conditions mentioned above are met, then the government allows the taxpayer to claim the following amounts. These tax deductions can be claimed regardless of the actual expenditure of the taxpayer on the dependent.
- Rs 75,000 (Starting from the financial year 2015-16) where disability is more than 40% and less than 80%.
- Rs 1,25,000 (Starting from the financial year 2015-16) where disability is more than 80%.