Deduction Section 80DD Maint- Medical treatment Handicapped Dependant

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Section 80DD Deduction under this section is available subject to following conditions
  1. Eligible Taxpayers to whom deduction is Available:This deduction can be claimed By Resident Individual/HUF.  He may be ordinary resident Indian or Not ordinary resident Indian. He may be foreign citizen or Indian citizen. However Non resident can not claim this deduction.
  2. Options:Taxpayer may have done any (or both) of following options
    1. The taxpayer has incurs any expenditure for the medical treatment, training and rehabilitation of a disabled dependant; or  
    2. Deposits any amount in schemes like Life Insurance Corporation for the maintenance of a disabled dependant. An annuity or a lump sum amount is paid to the dependant or to a nominee for the benefit of the dependant in the event of the death of the individual depositing the money, from the said scheme,
  3. Amount of deduction : A deduction of Rs 50,000 is available. The amount of deduction is fixed irrespective of the amount deposited/expenditure incurred  under option 2.1 or 2.2 as above.(read Circular /clarification issued by CBDT on section 80DD ) Where the dependant is with a severe disability, a deduction of Rs 1,00,000 is allowed. ( Rs 75000/- up to AY 2009-10)
  4. Death of the dependant occurs before that of the assessee:  If the death of the dependant occurs before that of the assessee, the amount in the scheme is returned to the individual and is taxable in his hands in the year that it is received.
  5. Certificate :An individual should furnish a copy of the issued certificate by the medical board constituted either by the Central government or a state government in the prescribed form, along with the return of income of the year for which the deduction is claimed,However as per new rule 12 no document is to be attached with Income tax return .
  6. Dependant Meaning :The term 'dependant' here refers to 
    • For Individual:the spouse, children, parents and siblings(brother,Sister) of the assessee who are dependant on him for maintenance.
    • For HUF : menber of  HUF  who are dependant on him for maintenance
  7. Depended claim of 80U :Further Dependant themselves haven't claimed a deduction for the disability under section 80U in computing their total incomes.
  8. Disability :Normal disability not less than 40 % and severe disability means more than and equal to 80 %
Example-1: X incurred  an expenditure of Rs 15000/- on medical treatment of his brother who is disabled 56% in Fy 2011-12. Calculate deduction available  ?

Ans: X can claim Rs 50000/- as deduction even though he has incurred an expenditure of 15000 only.However his brother must be wholly and mainly depended on him and his brother has not claimed deduction u/s 80U fo his disability .

Example 2: X purchased a policy with annual premium  of Rs 10000/-  for maintenance  of his handicapped brother who is disabled 56% in Fy 2011-12. Calculate deduction available  ?

Ans: X can claim Rs 50000/- as deduction even though he has paid premium of Rs 15000 only.However his brother must be wholly and mainly depended on him and his brother has not claimed deduction u/s 80U fo his disability .
Check other deduction

DEDUCTIONS FROM GROSS TOTAL INCOME (CHAPTER VIA):

Sl.No.
I.T. Sec.
Nature of Deduction
Amount of deduction
1.
a.




b.
c.
80 CCE
80 C




80 CCC
Limit on Deduction u/s.80C, 80CCC & 80CCD 

Life Insurance Premia, PF, PPF, NSC, ELSS, Units of Mutual Fund referred to u/s.10(23D), Tuition Fees(max. 2 Children), Repayment of Principal of Housing loan, Bank Fixed Deposit of 5 yrs period, notified Bonds of NABARD, Deposit in an account under Senior Citizens Savings Scheme rules, 5 year time deposit in an account under Post Office Time Deposit Rules, 1981 etc.
Premium paid towards approved Pension Fund (like LIC’s Jeevan Suraksha) max. 1 lakh.
Contribution to Central Government Pension Schemes. Upto 10% of salary with matching contribution from Government.                                                 
Maximum overall
Deductions
allowed u/s. 80C,
80CCC & sub-
section (1) of
sec.80CCD

 
2.
Deduction in respect of investment made under an equity savings scheme(only for Resident Individual) (subject to conditions)
50% of the amount invested subject to a maximum of Rs.25,000
3.
(a) Health Insurance Premium paid by an individual/HUF by any mode of payment other than cash to effect or keep in force an insurance on the health of the assessee(self) or his family(spouse & dependant children) for policies taken from General Insurance Corporation /other approved Insurance Regulatory and Development Authority or any contribution made to the Central Government Health Scheme or any payment made on account of preventive health check-up subject to a maximum of Rs.5,000.
(b) Medical Insurance Premium paid by an individual/HUF by any mode of payment other than cash to effect or keep in force an insurance on the health of his/her parent or parents for policies taken from General Insurance Corporation /other approved Insurance Regulatory and Development Authority or any contribution made to the Central Government Health Scheme or any payment made on account of preventive health check-up subject to a maximum of Rs.5,000.
(c) For Senior Citizens in respect of (a) & (b) above
Preventive health check up 
Upto Rs.15,000





Upto Rs.15,000




Upto Rs.20,000







up to 5000/- included in above limit.
4.
(a) Any expenditure for Medical, Nursing & Rehabilitation incurred on dependant suffering from permanent disability including blindness, mental retardation, autism, cerebral palsy or multiple disabilities

(b) Deposits under LIC, UTI’s Scheme & other IRDA approved insurers for the benefit of physically handicapped dependant
Rs.50,000 (Rs.1,00,000 if the disability is severe exceeding 80%)
5.
(a) Actual expenditure incurred on Medical treatment of Self or dependant or a member of HUF suffering from terminal diseases like Cancer, AIDS, Renal failure etc.
(b) For Senior Citizens(self or dependant on whom expenditure on medical treatment is taken)
Upto Rs.40,000


Upto Rs.60,000
6.
Interest on loan taken from Financial/Charitable Institutions for Self/Spouse/Children for pursuing Higher Education (for a max. period of 8 yrs)
Actual Interest repaid

7.
(a) Donations made to National Defence Fund, Prime Minister’s Relief Fund, approved Funds of reputed Educational Institutions, National Trust for Welfare of persons with Autism, Cerebral Palsy etc.
(b) Donations made to Jawaharlal Memorial Fund, PM’s Drought Relief fund, Any approved Charitable Institution/Trust, Religious Institutions, a corporation established by the Government for promoting interest of the members of a Minority Community
100% of Donation



50% of Donation restricted to 10% of Adjusted Gross Total Income  
8.
Deduction in respect of rents paid, provided the assessee is not in receipt of HRA and no house is owned by self, spouse, minor child or HUF in the place of work subject to filing of declaration in Form No.10BA
25% of income
or rent paid in excess of 10% of income
or ceiling of Rs.24,000 p.a whichever is less
9.
Deduction in respect in interest on deposits(not being time deposits) in a savings account with a banking company, a co-operative society and a post office
Rs.10,000
10.
80 U
Persons certified by the medical authority to be a person with disability
Rs.50,000 (Rs.1,00,000 in case of severe disability)


Complete section is reproduced here under


[Deduction in respect of maintenance including medical treatment of a dependant who is a person with disability.
80DD. (1) Where an assessee, being an individual or a Hindu undivided family, who is a resident in India, has, during the previous year,—          (a)  incurred any expenditure for the medical treatment (including nursing), training and rehabilitation of a dependant, being a person with disability; or
          (b)  paid or deposited any amount under a scheme framed in this behalf by the Life Insurance Corporation or any other insurer or the Administrator or the specified company subject to the conditions specified in sub-section (2) and approved by the Board in this behalf for the maintenance of a dependant, being a person with disability,
the assessee shall, in accordance with and subject to the provisions of this section, be allowed a deduction of a sum of fifty thousand rupees from his gross total income in respect of the previous year:

Provided that where such dependant is a person with severe disability, the provisions of this sub-section shall have effect as if for the words “fifty thousand rupees”, the words[“one hundred thousand rupees”] had been substituted.
(2) The deduction under clause (b) of sub-section (1) shall be allowed only if the following conditions are fulfilled, namely:—
          (a)  the scheme referred to in clause (b) of sub-section (1) provides for payment of annuity or lump sum amount for the benefit of a dependant, being a person with disability, in the event of the death of the individual or the member of the Hindu undivided family in whose name subscription to the scheme has been made;
          (b)  the assessee nominates either the dependant, being a person with disability, or any other person or a trust to receive the payment on his behalf, for the benefit of the dependant, being a person with disability.
(3) If the dependant, being a person with disability, predeceases the individual or the member of the Hindu undivided family referred to in sub-section (2), an amount equal to the amount paid or deposited under clause (b) of sub-section (1) 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.
(4) The assessee, claiming a deduction under this section, shall furnish a copy of the certificate issued by the medical authority in the prescribed form and manner, along with the return of income under section 139, in respect of the assessment year for which the deduction is claimed:

Provided that 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 year during which the aforesaid certificate of disability had expired, unless a new certificate is obtained from the medical authority in the form and manner, as may be prescribed, and a copy thereof is furnished along with the return of income.
Explanation.—For the purposes of this section,—          (a)  “Administrator” means the Administrator as referred to in clause (a) of section 2 of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002);
          (b)  “dependant” means—
       (i)  in the case of an individual, the spouse, children, parents, brothers and sisters of the individual or any of them;
      (ii)  in the case of a Hindu undivided family, a member of the Hindu undivided family,
                dependant wholly or mainly on such individual or Hindu undivided family for his support and maintenance, and who has not claimed any deduction under section 80U in computing his total income for the assessment year relating to the previous year;          (c)  “disability” shall have the meaning assigned to it in clause (i) of section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 1996) and includes “autism”, “cerebral palsy” and “multiple disability” referred to in clauses (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 (44 of 1999)];
          (d)  “Life Insurance Corporation” shall have the same meaning as in clause (iii) of sub-section (8) of section 88;
          (e)  “medical authority” means the medical authority as referred to in clause (p) of section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 1996)[or such other medical authority as may, by notification, be specified by the Central Government for certifying “autism”, “cerebral palsy”, “multiple disabilities”, “person with disability” and “severe disability” referred to in clauses (a), (c), (h), (j) and (o) of section 2 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 (44 of 1999)];
           (f)  “person with disability” means a person as referred to in clause (t) of section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 1996) [or clause (j) of section 2 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 (44 of 1999)];
      [(g)  “person with severe disability” means—
       (i)  a person with eighty per cent or more of one or more disabilities, as referred to in sub-section (4) of section 56 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 1996); or
      (ii)  a person with severe disability referred to in clause (o) of section 2 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 (44 of 1999);]          (h)  “specified company” means a company as referred to in clause (h) of section 2 of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002).] 

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