An individual can claim for the deduction if he/she incurs expenditure on medical treatment or rehabilitation of a differently abled dependent relative or even on training and nursing them. The payment or deposit made by an individual towards a specific scheme for the maintenance of the differently abled can be claimed if
1. The disability is 40% or more but less than 80% - individuals can get a fixed deduction of Rs 75000
2. If the level of disability is severe (80% or more) then individuals can get a fixed deduction of Rs 1,25,000
To claim the same one has to produce Certificate of Disability from a prescribed medical authority.
Expenses that are deducted for Income Tax Purpose
The following are the expenses that are exempted under Section 80DD
- Expenses incurred for medical treatment and include training, nursing, rehabilitation of the dependent who is disabled.
- Any amount paid towards the LIC, Unit Trust of India or any other insurance companies for the sole purpose of buying a specified scheme or an insurance policy which will help the dependents who are disabled.
Definition of Disabled Dependents as per Income Tax Act
A person can be treated as a disabled dependent if he or she fulfils the following laid down conditions as stated in the Income Tax Act of 1961.
- Any individual or a spouse or a daughter or a son (any child), parents as well as siblings (brother or sister) can be considered as a dependent disabled.
- The rule is applicable for individuals as well as the Hindu Undivided Family (any member of the HUF can be a disabled dependent)
- He or she should not take claim deduction under Section 80U.
- It is essential that the disabled individual should be wholly or mostly dependent on the assessee for their support as well as maintenance.