Deduction u/s. 80DD on Medical Treatment of Disabled for Expenses Dependent
Government of India has in order to provide some relief to those who have a dependent with disability or sever disability provided some relief’s from Income tax under section 80DD of the Income Tax Act, 1961.
Who is eligible to claim deduction?
· Individual or a Hindu undivided family, who is a resident in India.
· Deduction u/s 80DD is not available to non-resident Indian (NRI).
Policies in which one can invest
· Life Insurance Corporation of India offers two insurance policies – Jeevan Aadhar and Jeevan Vishwas for the benefits of parents or guardian of person with physical disabilities which qualify for tax benefit under Section 80DD.
These policies ensure that the dependant person with physical handicap does not have to depend on anybody for financial support in case something happens to his parent or guardian. The Jeevan Aadhar is a non- profit policy and is relatively cheaper whereas the Jeevan Vishwas is a policy which participates in profits.
Under both these insurance polices, the life of the person, on whom the handicapped person is dependant, is insured. In case the dependant dies before the guardian/parent, the parent/guardian will have the option to either keep the policy for a reduced paid-up sum assured or entitled to receive the refund of premiums paid.
However if the parent/guardian dies before the dependant, 20% of the lump sum assured becomes payable for the benefit of the dependant. Moreover the balance is paid by way of monthly annuity for 15 years for sure and thereafter for life on the life of dependant.
· The health insurance cover provided by National Trust needs special mention. The trust has introduced “Niramaya” health Insurance Scheme for persons with disabilities like Autism, Cerebral Palsy and Mental Retardation etc. Under this scheme, for those who have family income of less than Rs. 15,000 per month, you need to make a payment of Rs. 250 per year. For the person having family income of more than Rs. 15,000 per month is required to pay an amount of Rs.500 per year. For the families which are Below Poverty Line (BPL) this scheme is free, provided the applicant holds the BPL card. This scheme covers health expenses up to a limit of Rs. 100,000 per year for the person suffering from these disabilities. The scheme is administered by National Trust in collaboration with ICICI Lombard. Under this scheme even existing disease are covered without any medical check up. Moreover this plan covers routine expenses like medical check up, transportation and corrective surgery etc. which are not covered under regular health insurance products.