Deduction for Medical Treatment of Person with Disability [Section 80DD]
• Deduction is allowed to a resident individual or Hindu Undivided Family (HUF) who incurs medical expenditure or pays insurance premiums for the benefit of a dependent family member suffering from disability.
• For an individual assessee, dependent means spouse, children, parents, brothers, or sisters wholly or mainly dependent for support and maintenance. For HUF, dependent means any member of HUF wholly or mainly dependent for support and maintenance.
• A flat deduction of Rs. 75,000 is allowed if the person is suffering from disability; Rs. 1,25,000 if suffering from severe disability.
• Assessee must obtain a certificate of disability in Form 10-IA or any other format, as the case may be.
• If the dependent predeceases the assessee, the amount paid or deposited under the insurance scheme is deemed to be the income of the assessee for the previous years in which the amount is received.
• If the amount is received after the death of the assessee, it is exempt under Section 10(10D).
• If the assessee predeceases the dependent, the lump sum or annuity received by the dependent under the insurance policy is exempt under Section 10(10D).
• If a dependent receives any sum under an insurance policy in the event that the assessee attains the age of 60 years and the payment of such insurance scheme is stopped, the amount received is not taxable.