Section I: Income Tax and Your Career

• Ques: Medical Treatment of Self or Dependant
• Ans: Key points:
  • Under section 80DD, you can claim deduction if you have made any expense on the treatment of a disabled dependant. Or, if you have deposited any amount to LIC or any other insurer for the benefit of such dependant in the event of death.
  • Maintenance means an amount spent for day to day expenses of a dependant. It covers any expenses incurred on medical treatment, including nursing, training, or rehabilitation.
  • A dependant here means any person who is dependent for his support or maintenance on you. For the purpose of this deduction, dependant means spouse, children, parents, brothers, and sisters.
  • Disability means any physical or mental disability due to which a person has become dependent on someone for his/her maintenance and survival.
  • The medical authority provides certificate of disability in either of two forms: Form 10-IA, or a form prescribed by Equal Opportunities Act. 80DD covers all the expenses on maintenance whether in house or in hospital. This deduction is based on the disability certificate issued by a medical authority.
  • Form 10-IA mentions whether the disability is severe or non-severe. The other form mentions the percentage of disability. If this form mentions disability as less than 40%, then the disability does not qualify for deduction. If it is between 40%-80%, then the disability is non-severe. Above 80%, disability is termed severe.
  • Amount of deduction which can be claimed is fixed at either Rs 50,000 or Rs 75,000 (if the disability is severe), irrespective of the expense incurred.