Individuals and HUFs may seek a tax benefit under Section 80DD of the Income Tax Act for medical care of a person with a disability or differently-abled. The sum deducted would also cover premiums charged by specific insurance policies tailored for a disabled person.

Deduction under section 80DD

The following are the provisions that must be met in order to qualify for this deduction:

section 80DD
  • A deduction is permitted for a taxpayer’s dependent, but maybe not for the taxpayer themselves.
  • If the defendant has sought a deduction under section 80U for oneself, the taxpayer is not entitled to such a deduction.
  • In the event of an individual taxpayer, dependent children include the taxpayer’s partner, children, parents, brothers and sisters. In the situation of a HUF, it refers to a representative of the HUF.
  • The taxpayer has borne bills for the disabled people dependant’s medical care (along with nursing), training, and recovery, or the taxpayer might just have contributed in a LIC or some insurer’s plan for the dependant’s upkeep.
  • The dependant’s impairment is greater than 40%.
  • Section 2(i) of the Persons with Disabilities Act of 1995 defines disability.

Must read – What is Section 80E?

If the aforementioned terms are fulfilled, the sum of deduction permitted is

  • ₹75,000 where impairment is greater than 40% but less than 80%.
  • ₹1,25,000 where impairment reaches 80%.
  • These deductions are permitted regardless of how much you already spend.

Always bear in mind that prior to the FY 2015-16,  The deductible cap ₹50,000 for a disability of a minimum of 40% and ₹100,000 for impairment of more than 80%.

Disabilities Covered Under Section 80DD

The aforementioned disabilities are protected u/s 80DD of an Income Tax Act, 1961.

  • Hearing impairment 
  • Mental retardation 
  • Mental illness 
  • Autism 
  • Cerebral palsy 
  • Blindness 
  • Low vision 
  • Leprosy-cured 
  • Locomotor disability