It is difficult for an average salaried differently abled individual to bear their entire medical expenses. The Government of India has framed section 80DD under the Income Tax Act, to provide relief to people who are dependent-with-disabilities and people with severe disabilities. The only eligibility criteria for claiming income tax exemption under section 80DD is that the individual must be a resident of India, i.e, no NRI can claim tax exemptions under section 80DD.
The disabilities which are are listed under Section (i) Clause 2 of Persons with Disabilities Act, 1995.
Eligibility criteria to claim tax deductions
Medical certificate generated from any government hospital with the details of the individual’s disabilities.
Individuals suffering from multiple disabilities require to submit the form 10-IA as well.
A self-declaration claiming the medical expenses accrued by them during the financial year
Original certificates need to be submitted with respect to payments made to an insurer such as LIC or UTI for enrolling in any plans/schemes to take care of the differently abled person
Tax deductions under Section 80DD
Individuals with disabilities are subject to tax exemptions under Section 80 DD of Income Tax Act. A person who is dependent-with-disabilities (individual experiencing 40% and above level of disability), can claim tax exemptions upto Rs.50,000 and a person with severe disabilities can claim tax exemptions upto 1,25,000.