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Eligibility Criteria for Tax Deduction: Know All About

80dd of income tax act

In this era, people need to learn more about tax calculations; people need clarification how much they need to give back to the government in tax. You need to pay multiple taxes as per government norms in India. There are 19 different avenues to get tax deductions, including loans, life insurance, and public provident funds.

Claims made to lower your taxable income from different assets and costs spent by a taxpayer are referred to as tax deductions. An income tax deduction thereby reduces your overall tax obligation. It is a type of tax advantage that enables tax savings. However, the sort of tax advantage you claim will determine how much tax you can save.

Definition Of Section 80DD

Under Section 80DD, families that care for dependents with disabilities are entitled to tax incentives. Residents who are individuals or HUFs may claim a deduction for a dependant who is differently abled and entirely dependent on them for support and maintenance under Section 80DD of Income Tax Act. This claim can be made by both lone caregivers and Hindu Undivided Families (HUF).

Families of disabled people under Section 80DD can deduct the expense of care for a dependent who is handicapped. Under Section 80DD, families rather than dependents alone may claim deductions. A disabled person is ineligible to claim the same deduction under Section 80DD if they have already done so under Section 80U. HUFs and people providing care for a disabled dependant may file claims for Section 80DD payments. Costs related to providing care for handicapped dependents are eligible for deductions.

The deduction amount includes insurance premiums paid to certain insurers to assist a dependant who is disabled. We are compiling the eligibility criteria to give the readers a brief about the tax deduction.

  • Only the taxpayer’s dependents are eligible for a deduction, not the taxpayer.
  • Only Indian citizens may submit applications for the deduction.
  • If the defendant has once claimed a deduction for themselves under section 80U, they are not eligible to make another one.
  • The taxpayer may have paid for the dependent’s upkeep, instruction, and rehabilitation, or they may have made contributions to a maintenance plan of a LIC or another insurance (including nursing fees).
  • Under Section 80DD, a Hindu family is not separated, and a resident taxpayer is eligible for a tax deduction. Such a deduction may be available to dependents.

Types of Deductions Allowed Under Section 80DD?

This component offers a predetermined discount based on age and expenditure. If –

Dependant with severe disability – Someone with at least 80% of any handicap is considered a dependent with a severe disability. When a family member covers a dependent person with a significant disability’s medical expenses, these people are qualified for a tax subtraction of up to Rs. 1,25,000.

A reliant person with a disability – Someone with at least 40% of any impairment is considered dependent. If a family member covers the dependent person’s disability-related medical expenditures, they can claim a tax deduction of up to Rs 75,000.

Here are some disabilities that can be covered under section 80DD:

  • Blindness
  • Mental illness
  • Hearing impairment
  • Low vision
  • Autism
  • Mental retardation
  • Locomotor disability

These are some of the basic disabilities that could get covered under section 80DD. To get the full list of disabilities, look at government guidelines.

Benefits of Tax Deductions

The tax deduction has a lot of advantages, some of them are as follows:

  • Tax deductions enable you to lower your taxable income and minimize your tax liability. The amount of your income liable to tax decreases when you make a tax deduction claim.
  • You may save more money and invest it in other areas if your taxable income is lower.
  • The income due to the higher tax rates is initially decreased through tax deductions. Therefore, you are eligible to claim a tax deduction for the money you spent on tuition, healthcare, and charitable contributions.

What Is Section 80 D?

Regarding your tax planning and personal finances, Section 80D, which permits the deduction for expenses related to maintaining your health and health insurance, is quite essential. So people need to know how to fill schedule 80d. Benefits like

  • Spending on a health insurance policy’s premium.
  • Money is used for family members’ healthcare, especially parents.

Under section 80D, money spent on keeping health insurance coverage may be deducted. The plan’s insured’s age constrains the amount.

Difference Between Section 80DD And 80DDB

The Income Tax Act of 1961 establishes regulations determining how much you may deduct under Sections 80DD and 80DDB. With this knowledge, you will understand the difference between 80dd and 80ddb.

However, it would help if you things like you should claim the deduction as per Section 80DDB based on the expenditures incurred. Therefore, your tax deduction will be restricted to the actual spending paid in this scenario if your treatment expenses are lower than the amount indicated in the section. As long as a valid disability certificate is provided by a competent medical authority, such as a neurologist, urologist, oncologist, immunologist, hematologist, etc., the deduction can be received under Sections 80DD and 80U regardless of the actual expenditure expended. In order to receive benefits under Sections 80DD and 80U, a person’s disability must also be at least 40%, according to the certifying body; however, this requirement does not apply when claiming a deduction under Section 80DDB.

80dd limit

Required document to claim deduction under section 80DD

The following papers must be submitted as per the 80DD section of the Income Tax Act to be eligible for tax benefits. So read all the 80DD limits carefully.

  • Medical Certification: To be eligible for a tax credit under Section 80DD, the taxpayer must submit a copy of the medical certificate attesting to the dependent’s disability.

  • Receipts for Insurance Premium Paid: The individual does not need to preserve the actual receipts because the self-declaration certificate will be sufficient to claim the bulk of expenditures. However, if a claim is made for the cash spent on insurance policies bought for the disabled dependant, the actual receipts for the costs must be kept on file.
  • Certification of self-declaration: Taxpayers must show a self-declaration certificate outlining the expenses incurred for the disabled dependent’s medical care, including nursing, rehabilitation, and training.
  • Form 10-IA: If your dependant is handicapped and has multiple impairments, such as autism, cerebral palsy, or both, you must file Form No. 10-IA.

Final Thoughts:

We tried to explain 80D, 80DD, and 80 DDB, which might have answered your question, like can medical bills be claimed under 80D, etc., At last hope, you had a great reading. Section 80DD has its own benefits for people suffering from disabilities and diseases. It needed a great scheme by the government. If you read the article till the end, you might get to learn multiple unknown things about these schemes. Also, if you want to know about the TDS refund claim and all other relevant details about it, then read our article on the following topic.