The Income Tax Act permits deductions from your general gross income earlier than the levy of the tax if medical expenditure has been incurred on the treatment of an in a different way abled man or woman. Sections 80DD and 80U of the Income Tax Act offer the clinical expenditure incurred for this purpose.
Abhishek Soni, CEO, tax2win.In a tax-submitting internet site says, “Section 80DD and Section 80U of the Income Tax Act allow a deduction for the scientific fees incurred for otherwise abled individuals. The quantity of deduction is identical for both sections. Though the working of these two deductions is equal, one needs to consider that they cannot be claimed concurrently.
However, Section 80DD may be claimed using a person who has incurred fees based on another way-abled character. On the other hand, 80U may be claimed by using the man or woman if he/she, himself/herself, is in any other way abled. If the person is claiming a deduction under phase 80U, no other person can declare a deduction below phase 80DD for the character above. Here is the whole lot you need to recognize approximately claiming deduction under section 80DD and 80U.
Who can declare the deduction?
As mentioned above, deduction under phase 80DD may be claimed by a resident person who has incurred expenditure for the training, rehabilitation, or medical treatment of a differently-abled or disabled established individual. The earnings tax law defines a dependent as a partner, a youngster, a parent, a brother, or a sister of the person who is dependent on the man or woman for support and protection.
“The deduction can also be claimed if a fee or deposit has been made by way of the man or woman under any scheme of Life Insurance Corporation (LIC), or some other insurer, or any other specific scheme or deposit for the maintenance of the structure. The scheme needs to provide the annuity or lump-sum benefit in the event of the death of the person for the maintenance of the based man or woman who has a disability,” says Soni.
Conditions for claiming the deduction
The deduction underneath either segment 80DD or 80U can be claimed handiest if the individual himself or an established person is affected by disability, autism, cerebral palsy, or multiple disabilities. The percentage of disability ought no longer be less than 40 percent to be eligible to claim a deduction under these sections. If you’re claiming the deduction allowed for extreme disability, then the incapacity level has to be a minimum of eighty percent. To avoid the rejection of the declaration for deduction by the profits tax department, one has to satisfy the definition of incapacity, autism, cerebral palsy, or multiple disabilities according to the act governing the equal.
Disability is described as consistent with the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1955. Soni says, “As in step with Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995, incapacity is defined as someone who is suffering from blindness, low imagination and prescient, leprosy-cured, hearing impairment, locomotor incapacity, intellectual retardation, intellectual contamination, autism, cerebral palsy and a couple of disabilities. A person with disability method someone laid low with not much less than forty in line with a cent of any incapacity as certified by way of scientific authority.”
Similarly, autism, cerebral palsy, and more than disability take their meaning from the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation, and Multiple Disabilities Act, 1999. Soni says, “Multiple disabilities can be described as the person tormented by an aggregate of one or more disabilities as described in the Person with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995.”
The amount of deduction depends on incapacity, not expenses & age
The amount of inference that may be claimed depends on the proportion of inability. If the man or woman or structure has forty in step with a cent or other disability but less than 80 consistent with cent, then the deduction of Rs seventy-five 000 may be claimed in a financial year.
Soni says, “The quantity of deduction depends on the share of incapacity. In case of severe disability, i.e., if the share of incapacity exceeds 80 according to the cent, then the deduction of Rs 1.25 lakh is authorized. The deduction claimed is constant irrespective of the real costs. Therefore, even though the real expenses are less than Rs 75,000 or Rs 1.25 lakh as applicable, you could still declare the cited quantity”.
Documents required
To declare this deduction, either under Section 80DD or Section 80U, one needs to provide a certificate of incapacity. Soni says, “As in step with the income tax laws to claim a deduction, one is required to acquire a certificate in the prescribed w,ay as noted in Form 10-IA. The certificate has to be received from the prescribed medical authority.”
The clinical authority required to issue the incapacity certificate shall be a neurologist with a degree of Doctor of Medicine in Neurology (in case of youngsters, a pediatric Neurologist having an equivalent diploma) or a local healthcare professional or chief medical officer in a Government health facility.
“No deduction can be allowed from the financial 12 months from which the disability certificates have expired, except new certificates are acquired from the aforesaid scientific authority,” says Soni.
