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Kotak Lifetime Income Plan
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Ref. No. KLI/22-23/E-BB/492
Ref. No. KLI/22-23/E-BB/490
Learn about what are the deductions for disability of dependent under section 80DD in Income Tax Exemptions. To know more, Visit Now
It is natural that we want to look after the people we care about, when we become older. However, a stronger commitment is required when a loved one has a disability that necessitates round-the-clock care. It’s just as crucial to meet their daily needs as it is to ensure their future. The most recent health crisis has served as a strong reminder of the life-altering impact pandemics and other disasters can have on vulnerable people and their families. A sudden illness or accident can be tough to overcome without a financial plan to offer a safety net for your loved ones.
This is why putting together a mix of financial instruments, including life insurance , is crucial to safeguarding your family. In addition, the increased duty of supporting a loved one who has a disability necessitates the creation of a long-term financial plan for their care. While these investments assure the financial security of loved ones in the future, significant tax benefits are now available for the support and maintenance of a differently-abled dependent under the Income Tax Act, 1961.
Income tax is a tax collected by the Government of India from the earning members of the nation. It is calculated based on the gross yearly income and can differ as per the income capabilities of the individual. The collection, monitoring, and administration of this tax are governed under the Income Tax Act of 1961. This act not only authorizes tax collection but also states tax benefits and deductions that can be used to lower a person’s tax liability. For people with a physically handicapped dependent, this act offers provisions under Section 80DD.
Section 80DD of the Income Tax Act, 1961 allows individuals to claim tax-saving deductions for disabled and financially dependent family members.
Following criteria are crucial to claim income tax exemption for disabled dependents:
1.This tax deduction is only allowed for resident individuals and Hindu Undivided Families (HUFs).
2.Since the tax deduction is not allowed for Non-Resident Individuals (NRIs), they cannot claim this deduction.
3.People who claim a deduction under Section 80U, which benefits people with disabilities directly, are not eligible for a deduction under Section 80DD.
4.Taxpayers who choose to file under the new income tax regime outlined in the Union Budget 2020 will lose the deduction under Section 80DD that they received under the previous scheme.
5.Disabilities covered to qualify for tax deduction under Section 80DD:
The following conditions have been mandated by law to claim tax deduction under Section 80DD:
The following sum can be claimed as a deduction:
You can’t afford to leave your spouse, child, sibling, or parent’s future to chance if they have a disability. Term life insurance and other products of the kind can assist you in planning for and delivering much-needed tax advantages. Now is the time to choose a plan that meets your needs so that you can look after your loved one’s medical care, training, and rehabilitation costs without spending a fortune. Consult your financial advisor to determine the best insurance for your family’s future, and engage a tax specialist to determine how to optimize tax savings for disabled dependents.
Kotak provides you with a well-researched, expert tax-saving guide that can help you lower your tax liability by using the right approaches. Refer to this guide for useful information on how to file and save taxes.
Ref. No. KLI/22-23/E-BB/999
Ref. No. KLI/22-23/E-BB/490
