Imagine your father has a physical disability and you spend money on his physiotherapy, special training, or pay into an LIC scheme to secure his future. Section 80DD is the tax relief the government gives you for bearing that responsibility. It's a fixed flat deduction — not linked to how much you actually spent — so even if you spent ₹20,000, you still get the full deduction amount.
Here's the rule: If you are an individual or HUF who is a resident in India, and you've either (a) spent on medical treatment, nursing, training, or rehabilitation of a disabled dependant, OR (b) paid into an approved LIC/insurer scheme for the dependant's maintenance, you get a deduction from your Gross Total Income. The deduction is ₹75,000 if the dependant has a disability of 40% or more. It jumps to ₹1,25,000 if the dependant has a severe disability (80% or more). That's it — no bills needed, no proof of expenditure amount, just the disability certificate from a recognised medical authority filed with your ITR.
A few things exam papers love to test: First, the dependant cannot have claimed deduction under Section 80U themselves — it's either the caretaker claiming 80DD, or the disabled person claiming 80U, never both. Second, if you invest in an LIC scheme under 80DD and the dependant dies before you, the money you get back becomes taxable income in your hands in the year of receipt. Third, the disability certificate has an expiry — if it lapses and you don't renew it, your deduction stops. This is asked frequently as a 4-mark or 5-mark question in CA Inter exams, especially the comparison between 80DD and 80U.
Example 1 — Normal Disability
Mr. Ramesh Iyer (resident individual) has a brother with 55% permanent disability (qualifies as person with disability). During FY 2025-26, Ramesh spent ₹90,000 on his brother's physiotherapy and special training. His brother does not claim any deduction under 80U.
Working:
- Actual expenditure = ₹90,000
- Deduction under 80DD = Fixed ₹75,000 (actual spend is irrelevant; the deduction is capped at the flat amount)
- Deduction allowed = ₹75,000
Note: Even though Ramesh spent ₹90,000, he only gets ₹75,000. The excess ₹15,000 gives no additional benefit.
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Example 2 — Severe Disability + Insurance Scheme
Ms. Priya Sharma (resident individual) has a son with cerebral palsy, classified as severe disability (85%). She pays ₹40,000 annually into an LIC-approved scheme for her son's maintenance. Her son does not claim 80U.
Working:
- Son has severe disability (≥80%) → higher deduction slab applies
- Deduction under 80DD = Fixed ₹1,25,000
- Actual amount paid = ₹40,000 (again, irrelevant to the deduction quantum)
- Deduction allowed = ₹1,25,000
Bonus twist: If Priya dies before her son, the LIC pays out to her son. But if her son predeceases her, the LIC refund received by Priya will be fully taxable as her income in that year.
📖 Bare Act text — Section 80DD, Income Tax Act 1961
(click to expand)
(1) Where an assessee, being an individual or a Hindu undivided family, who is a resident in India, 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 or any other insurer or the Administrator or the specified company subject to the conditions specified in sub-section (2) and approved by the Board in this behalf for the maintenance of a dependant, being a person with disability, the assessee shall, in accordance with and subject to the provisions of this section, be allowed a deduction of a sum of seventy-five thousand rupees from his gross total income in respect of the previous year: Provided that where such dependant is a person with severe disability, the provisions of this sub-section shall have effect as if for the words "seventy-five thousand rupees", the words "one hundred and twenty-five thousand rupees" had been substituted. (2) The deduction under clause (b) of sub-section (1) shall be allowed only if the following conditions are fulfilled, namely:— (a) the scheme referred to in clause (b) of sub-section (1) provides for payment of annuity or lump sum amount for the benefit of a dependant, being a person with disability, in the event of the death of the individual or the member of the Hindu undivided family in whose name subscription to the scheme has been made; (b) the assessee nominates either the dependant, being a person with disability, or any other person or a trust to receive the payment on his behalf, for the benefit of the dependant, being a person with disability. (3) If the dependant, being a person with disability, predeceases the individual or the member of the Hindu undivided family referred to in sub-section (2), an amount equal to the amount paid or deposited under clause (b) of sub-section (1) shall be deemed to be the income of the assessee of the previous year in which such amount is received by the assessee and shall accordingly be chargeable to tax as the income of that previous year. (4) The assessee, claiming a deduction under this section, shall furnish a copy of the certificate issued by the medical authority in the prescribed form and manner, along with the return of income under section 139, in respect of the assessment year for which the deduction is claimed: Provided that where the condition of disability requires reassessment of its extent after a period stipulated in the aforesaid certificate, no deduction under this section shall be allowed for any assessment year relating to any previous year beginning after the expiry of the previous year during which the aforesaid certificate of disability had expired, unless a new certificate is obtained from the medical authority in the form and manner, as may be prescribed, and a copy thereof is furnished along with the return of income. Explanation.—For the purposes of this section,— (a) "Administrator" means the Administrator as referred to in clause (a) of section 2 of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002); (b) "dependant" 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, dependant wholly or mainly on such individual or Hindu undivided family for his support and maintenance, and who has not claimed any deduction under section 80U in computing his total income for the assessment year relating to the previous year; (c) "disability" shall 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); (d) "Life Insurance Corporation" shall have the same meaning as in clause (iii) of sub-section (8) of section 88; (e) "medical authority" means the medical authority as referred to in clause (p) of section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 1996) or such other medical authority as may, by notification, be specified by the Central Government for certifying "autism", "cerebral palsy", "multiple disabilities", "person with disability" and "severe disability" referred to in clauses (a), (c), (h), (j) and (o) 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); (f) "person with disability" means a person as referred to in clause (t) of section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 1996) or clause (j) 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); (g) "person with severe disability" means— (i) a person with eighty per cent or more of one or more disabilities, as referred to in sub-section (4) of section 56 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 1996); or (ii) a person with severe disability referred to in clause (o) 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); (h) "specified company" means a company as referred to in clause (h) of section 2 of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002).