Needs proof of disabled spend
QI am an employee working in an MNC. I have a mentally-challenged (by birth) daughter, who is 21 years old. She was diagnosed as having “moderate mental retardation” i.e. having IQ level less than 50. I was availing deduction under section 80DD for having a dependent disabled child based on the certificate obtained from NIHM. But that has been stopped now. Please advice.
A) For claiming deduction under section 80DD in respect of maintenance including medical treatment of a dependant who is a person with disability, the following conditions needs to be satisfied:
1) He is an assessee being an individual or a Hindu Undivided Family who is a resident in India.
2) The assessee has during the previous year:
a) incurred any expenditure for the medical treatment (including nursing), training and rehabilitation of a dependant, being a person with disability; or
b) paid or deposited any amount under a scheme framed in this behalf by the Life Insurance Corporation of India or any other insurer.
If these conditions are fulfilled, the assessee shall be allowed a deduction of a sum of `75,000 from his gross total income in respect of the previous year. Provided that where such dependant is a person with severe disability [a person with 80 per cent or more of one or more disabilities] a deduction of `1,25,000 is allowed.
3) The scheme referred to in (2)(b) above provides payment of annuity or lumpsum amount for individual or the member of HUF in whose name subscription of the scheme has been made; and
4) Subscriber, i.e., assessee referred to in (2)(b) above is required to nominate either the handicapped dependant or a trust or any other person to receive the payment on his behalf, for the benefit of the handicapped dependant.
5) The assessee, claiming a deduction under this section, needs to obtain a certificate issued by the medical authority in the prescribed form and manner. Rule 12 provides that the return of income will not be accompanied by any document or copy to be attached with the return of income. The certificate mentioned above may have to be produced later, only if required by the Assessing Officer.
“Disability” will have the meaning assigned to it in clause (i) of section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 1996) and includes “autism”, “cerebral palsy” and “multiple disability” referred to in clauses (a), (c) and (h) of section 2 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 (44 of 1999); Dependant” means in this context means:
(i) in the case of an individual, the spouse, children, parents, brothers and sisters of the individual or any of them;
(ii) in the case of a Hindu undivided family, a member of the Hindu undivided family.
Certain conditions need to be fulfilled for claiming deduction under section 80DD in respect of maintenance including medical treatment of a dependent who is a person with disability
(The writer is a Hyderabad-based chartered accountant. Please send your queries to info@rathiandmalani.com)