The Income-tax Act, of 1961, offers numerous deductions to help reduce the taxable income of individuals. Sections 80DD and 80U stand out for providing significant deductions for medical expenses to individuals with disabilities and their dependents. However, to avail these benefits it is essential to accurately file Form 10-IA.
Importance of Form 10-IA
Filing Form 10-IA is required to claim deductions under Sections 80DD and 80U of the Income-tax Act of 1961. These deductions significantly reduce taxable income for individuals with disabilities or their dependents. You can claim the deduction under Section 80DD starting from the year the certificate was issued until the year it expires.
To claim these deductions, a valid disability certificate is required. The certificate should be issued by a neurologist, civil surgeon or chief medical practitioner at a government hospital. If the certificate expires, a new one must be obtained and submitted with the ITR. Form 10-IA ensures proper documentation and compliance with tax regulations. For complex cases, it is advisable to consult a tax professional to optimize your tax benefits.
Who Can Claim Deduction?
Under Section 80DD
Under Section 80DD, a resident individual or Hindu Undivided Family (HUF) can claim a deduction for expenses related to the medical treatment, training, and rehabilitation of a dependent with a disability. This deduction is allowed for a dependent of the taxpayer and not the taxpayer himself. The dependent must be wholly dependent on the individual or HUF and have at least 40% disability including conditions such as blindness, low vision, hearing impairment, locomotor disability, mental retardation, or mental illness.
Individuals with disabilities can receive a deduction of up to ₹75,000 and ₹1,25,000 for severe disabilities (80% or more). A genuine medical certificate is essential to back up the claim and should be updated as necessary.
Under Section 80U
Section 80U of the Income-tax Act permits a person who has been certified by a medical authority as disabled to receive a tax deduction. To be eligible, the individual must have at least 40% disability which includes conditions such as blindness, low vision, hearing impairment, locomotor disability, mental retardation or mental illness. This deduction is for the taxpayer's disability and not for dependents.
The deduction for disabled people is ₹75,000 while for those with severe impairments (80% or more), it is ₹1,25,000. It is necessary to produce the certificate of incapacity with the tax return after receiving it from an approved medical authority.
How to File Form 10-IA?
1. Log in to the e-Filing Portal:
- Go to the Income Tax e-Filing website and sign in.
2. Go to the Applications Section:
-Select 'e-File' from the dashboard.
-Select Income Tax Forms.
- Go to File "Income Tax" Forms and choose.
3. Choose Form 10-IA from 'Persons without Business/Professional Income'.
4. Select the Assessment Year: 2024-25.
5. Start the Filing Process:
- Click 'Let's get started'.
6. Complete the form:-
-Enter all needed information.
- To check your information, select the 'Preview' option.
7. Click the 'Proceed to e-Verify' button.
- Review the information and click 'Proceed'.
8. Select an e-verification method:
Required documents are Aadhaar OTP, Digital Signature Certificate (DSC), and Electronic Verification Code (EVC).
