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Tax Benefits

Tax benefits provided to the people with special needs in our country


One can claim deduction under Section 80DD for medical expenses of a physically challenged dependent for amount from Rs 50,000 to Rs 1 lakh. The deduction is available to An individual or a Hindu Undivided Family (HUF) can avail this deduction, who has during the previous year incurred any expenditure for the medical treatment (including nursing), training and rehabilitation of a physically-challenged dependent or deposited any sum under a scheme framed in this behalf by an insurer or the UTI and which is approved.

The deduction can be claimed by producing of a certificate from a medical authority according to a prescribed form. The facility of deduction of Rs 50,000 is available in general cases. If the severity of the case is high a deduction of Rs 1 lakh is allowed (assessment year 2009-10). It includes autism, cerebral palsy and multiple disabilities. A person with 80% or more disability is regarded as having severe disability.

Here the word "dependent" means parents, spouse, children and siblings who are dependent on an individual for maintenance and other basic needs. Claim for deduction for their ailment must not have been made by any of them..

Deduction allowed in Section 80DD will be allowable in full till the conditions specified in 80D are satisfied. The assessee must be a resident in India. The physically-challenged dependent should be a relative of the assessee and not dependant on any person other than the assessee for support or maintenance.

A physician or psychiatrist, working in a government hospital. should certify the permanent disability or mental retardation. The disability should reduce considerably the person's capacity for normal work, gainful employment or occupation.The deduction under Section 80DD of the Income Tax Act is statutory in nature.

Deposits to schemes of the Life Insurance Corporation or any other insurer or Unit Trust of India are also allowed. In case of the death of the dependent, the amount deposited will be co to be the income of individual of the previous year in which such amount is received by the individual. Accordingly, it will be stated as the income to be chargeable under income tax as the income of the previous year.

The individual must produce a copy of the certificate issued by the medical board either of the central or state government in the prescribed form. A copy of the income tax return of the same year must also be produced.