What Is Section 80DD in Income Tax?

It is quite a challenge to manage the needs of a disabled family member. To share this financial strain, the government in India through Section 80DD of the Income Tax Act provides you with some tax deductions based on the money you spend on your disabled dependent. Let's try to figure out the actual meaning of it.

Who Can Claim Section 80DD?

The answer is simple. You, the Indian individual resident or a member of the Hindu Undivided Family (HUF) together with a disabled dependent in the family, can claim this tax break.
Your relatives are defined as a spouse, children, parents, brothers, or sisters.
The condition is that their impairment is at least 40%, as certified by a medical authority.

What Does Section 80DD Cover?

This deduction can be claimed for the medical expenses, nursing, training, or rehabilitation of the disabled dependent.
It can also include premiums paid toward designated insurance policies approved by the income tax department for the care of the dependent.

How Much Can You Deduct?

You get a fixed deduction of ₹75,000 if the disability is between 40% and 80%.
For severe disabilities (80% and above), the deduction increases to ₹1,25,000.
This is a flat amount, meaning you receive the deduction even if your actual expenses are less.

Example:
Ramesh supports his disabled sister, who has a 60% disability. He spends ₹40,000 on her medical care and pays ₹40,000 toward an approved LIC policy. Under Section 80DD, Ramesh can claim a deduction of ₹75,000.

Quick Bullet Summary

• Available to Indian residents and HUFs.
   
• Disability must be at least 40% (certified by medical authority).
   
• Dependents include spouse, children, parents, or siblings.
   
• Fixed deduction: ₹75,000 or ₹1,25,000 (not based on actual expense).

Isurance premiums paid for approved plans are also covered.