Section 80DD Tax Deductions in respect of maintenance including medical treatment of a dependent who is a person with disability:
Circular No: 29/2017; Date: 5th December, 2017
Under section 80DD, where an employee, who is a resident in India, has, during the previous year-
(a) incurred any expenditure for the medical treatment (including nursing), training and rehabilitation of a dependant, being a person with disability; or
(b) paid or deposited any amount under a scheme framed in this behalf by the Life Insurance Corporation or any other insurer or the Administrator or the specified company subject to the conditions specified in this regard and approved by the Board in this behalf for the maintenance of a dependant, being a person with disability, the employee shall be allowed a deduction of a sum of Rs 75,000/– from his gross total income of that year.
However, where such dependant is a person with severe disability, an amount Rs 1,25,000/- shall be allowed as deduction subject to the specified conditions.
The deduction under (b) above shall be allowed only if the following conditions are fulfilled:-
- (i) the scheme referred to in (b) above provides for payment of annuity or lump sum amount for the benefit of a dependant, being a person with disability, in the event of the death of the individual in whose name subscription to the scheme has been made;
- (ii) the employee nominates either the dependant, being a person with disability, or any other person or a trust to receive the payment on his behalf, for the benefit of the dependant, being a person with disability.
However, if the dependant, being a person with disability, predeceases the employee, an amount equal to the amount paid or deposited under sub-para(b) above shall be deemed to be the income of the employee of the previous year in which such amount is received by the employee and shall accordingly be chargeable to tax as the income of that previous year.
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