Section 80DD & Section 80U: Deduction for Disability

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Section 80DD & Section 80U deal with income tax deductions for individuals and their family members with disabilities. Deduction under Section 80U is provided in case the individual is himself disabled and Deduction under Section 80DD is provided in case any of the dependent family members of the individual is disabled.

Section 80U and Section 80DD can be claimed over and above all other deductions and can be claimed both by Individual as well as HUF

Section 80U: Deduction for Disability of the Individual himself

Any person who has been certified by a medical authority as a person with severe disability is allowed to claim deduction under Section 80U. The Deduction allowed is as follows:-

Category Deduction Allowed
Disabled
(a person with 40% or more of one or more disability)
Rs. 50,000 p.a. (increased to Rs. 75,000  from Financial Year 2015-16)
Severely Disabled
(a person with 80% or more of one or more disability)
Rs. 1,00,000 p.a. (increased to Rs. 1,25,000 from Financial Year 2015-16)

No Medical bills or Insurance Premium Receipts are required to be submitted at the time of filing income tax return for claiming deduction under Section 80U. If a person is disabled/severely disabled, he would be allowed a flat deduction at the rates specified above irrespective of the expenditure incurred.

section -80dd-80u

Section 80DD: Deduction for Medical Disability of a dependent Family Member

If a person incurs any expenditure on medical treatment of a dependent family member with Medical Disability, he would be allowed to claim deduction under Section 80DD.

Deduction under Section 80DD would also be allowed in case the person has paid or deposited any amount with specified insurers as insurance premium for the maintenance of a dependent person with medical disability.

The deduction allowed is as follows:

Category Deduction Allowed
Disabled
(a person with 40% or more of one or more disability)
Rs. 50,000 p.a. (increased to Rs. 75,000  from Financial Year 2015-16)
Severely Disabled
(a person with 80% or more of one or more disability)
Rs. 1,00,000 p.a. (increased to Rs. 1,25,000 from Financial Year 2015-16)

The term dependent means:-

In case of Individual Spouse, Children, Parents, Brothers or Sisters
In case of HUF Any member of the HUF

The Income Tax Authorities have clarified that even if any amount of expense is incurred to medical treatment/ insurance premium paid, full deduction would be allowed as specified above irrespective of the amount of expense incurred/paid as insurance premium. (Refer: Circular No. 702 dated 03-04-1995 and Circular No. 775 dated 26-03-1999)

It is be noted that in case the dependent dies before the death of the individual and any amount is paid by the insurance company to the individual, such amount received would be taxable in the hands of the individual in the year in which such amount is received and would be taxable as per the income tax slabs of that year.

Disabilities specified under Section 80DD and Section 80U

Deductions for Several Disabilities have been allowed under Section 80DD and Section 80U by the Income Tax Authorities. A few of the approved disabilities have been mentioned hereunder for ready reference:-

  • Blindness
  • Low Vision
  • Leprosy-cured
  • Hearing Impairment
  • Loco Motor Disability
  • Mental Retardation

A Personal Finance enthusiast, Karan is the founder of charteredclub.com and loves to discuss about Money related matters.