Caring For A Disabled Dependent Will Buy You A Tax Relief
BENGALURU: It is never an easy journey for a family that looks after a disabled member. Only they can truly understand emotionally as well as monetary tantrum they go through. But these families of disabled dependents can have some monetary relief when they fill their IT returns. (Source: Yahoo! Finance)
Deductions under section 80DD are allowed by the Income Tax Department on the expenses made to take care of a disabled or differently-abled dependent for individuals and Hindu Undivided Family (HUF). Though if the dependent is differently-abled and wholly dependent on the individual then only this deduction available. Also the individual claiming the deduction must be a HUF member.
The disabled person is also allowed by the Section 80U for claiming deductions. It must be noted that if an individual or HUF have already claimed the compensation under Section 80DD, then they can’t claim any further compensation under 80U.
Under 80DD, the taxpayer who has claimed the deduction should have incurred expenses for the medical care, training and rehabilitation of the disabled person, and also must have deposited money in an insurance scheme. Also, the disability of the dependent should not be less than 40% and defined under Section 2(i) of the Persons of Disabilities Act, 1995.
The taxpayers who fulfill all the above conditions can claim 75,000 INR deduction (where disability is less than 80% and more than 40%), and 1,25,000 (where disability is more than 80%) for the financial year FY2016-17. Irrespective of the actual expenses incurred, these deductions are allowed. This means that even if the expenses have not been that high, the full amount can be claimed.
The disabilities that are covered under the section include mental retardation, cured leprosy, loco motor disability, hearing impairment and vision impairment.
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