Existing limit maintained for less-severe disorders.
Budget 2009-10 has enhanced the deduction given under Section 80DD for severe ailments, from the present limit of Rs 75,000 to Rs 1 lakh.
Section 80DD pertains to deduction for maintenance (including medical treatment), training and rehabilitation of a handicapped dependent; or on the amount paid or deposited under a scheme of the Life Insurance Corporation or Unit Trust of India for maintenance of handicapped dependent.
The changes will help people whose dependents have to go through treatment from severe ailments like “right hemiplegia” (left-hemisphere brain stroke causing paralysis of the right side of the body). But the enhanced benefit is only available for severe disabilities. The Budget has not changed provisions for those with less severe ailments and maintained deductions at Rs 50,000.
Others who are eligible to avail benefits under this Section are dependents whose application for Mediclaim was denied due to severe disabilities. Experts believe that people covered under Mediclaim form around 3 to 4 per cent of the total population and instances of nominations getting cancelled on medical grounds is on the rise.
Rajiv Singhal, a chartered accountant, said the increase in deduction enhancement would help the assessees who can now plan to avail Section 80DD benefits instead of Mediclaim benefits, which might be denied due to disability.
However, some tax experts believe that Section 80DD is not widely used by the taxpayers. Nimesh Shah, a company secretary, said people availing deduction under this section were in a minority and it would not exceed 2-3 per cent of the assessees.
