Tax Benefits under Section 80DD

What is Section 80DD?
Section 80DD comes in the law of India Income Tax Deductions. This is a deduction in respect of medical and other maintenance available to an individual who: 
Incurs any form of medical treatment, training or rehabilitation expenditure of a disabled dependant; or
Deposits any amount in schemes framed under Life Insurance Corporation or Unit Trust of India for the maintenance of a disabled dependant.

 A lump sum amount or annuity is paid to the dependant or to his/her nominee in whom the dependant draws the benefit incase of death of individual depositing money in the scheme.

Herein, the individual nominates either the handicapped dependant or any other person or trust to receive payment on his/her behalf for handicapped dependant’s benefit.

What if the handicapped dependant predeceases the individual?

In such a case an amount equal to the amount paid to be deposited shall be deemed to be the income of individual of the previous year in which such amount is received by the individual. Accordingly it shall be stated as the income to be chargeable under income tax as the income of the previous year.

How much will be the deduction in section 80dd of Income tax act?

The facility of deduction of Rs 50000 is available in general cases. If the severity of the handicap pf the dependant is high a deduction of Rs 1,00,000 is allowed (as per AY 2009-10).

What all documents are required to accomplish the process of deduction?

It is important for the individual to produce a copy of the certificate issued by the medical board either by Central or the State Government in the prescribed form. A copy of the income tax return of the same year must also be produced.

Who is a dependant?

The term dependant here refers to parents, spouse, children and siblings who are dependant on an individual for maintenance and other basic needs. Any of them must not have claimed for a deduction for their disability. This form of deduction is also applicable to Hindu Undivided Families (HUF).