Form 10 IA - Claiming Deductions for Disabled Dependents

Taxpayers in India often focus on deductions under Section 80C for investments or Section 80D for health insurance. However, there are lesser-known yet significant sections that provide tax relief for individuals or Hindu Undivided Families (HUFs) who have dependents with disabilities. One such provision is the deduction available under Section 80DD of the Income Tax Act, 1961. To claim this deduction, taxpayers are required to submit a valid Form 10 IA - Section 80DD Deduction certificate issued by an authorised medical authority. This article provides an in-depth understanding of Form 10 IA and how it helps claim deductions under Section 80DD and 80U.

What is Form 10 IA?

Form 10 IA is a medical certificate issued by a certified medical authority, which confirms the nature and extent of disability suffered by an individual or a dependent. It is mandatory for claiming deductions under Section 80DD for disabled dependents and under Section 80U for self-disability. The form must be issued by a neurologist with an MD in Neurology or, in the case of children, a paediatric neurologist. In absence of such specialists, a civil surgeon or chief medical officer of a government hospital is authorised to issue this certificate.

Importance of Form 10 IA - Section 80DD Deduction

Form 10 IA is essential for claiming the tax deduction under Section 80DD and Section 80U. Without this document, the deduction cannot be allowed even if the taxpayer has incurred actual expenses. The form provides documentary proof that the dependent or individual is indeed suffering from a specified disability, as defined under relevant laws.

Eligibility Criteria under Section 80DD

Section 80DD allows tax deductions for expenses incurred on the medical treatment, training, and rehabilitation of a dependent with a disability. The taxpayer must be a resident individual or HUF. Dependents can include the taxpayer’s spouse, children, parents, brothers, or sisters. For HUFs, any member of the HUF is considered a dependent.

The condition is that the dependent must be suffering from a disability, which includes but is not limited to, autism, cerebral palsy, mental retardation, or multiple disabilities. The dependent must not be claiming deductions under Section 80U.

Deduction Limits under Section 80DD

Under Section 80DD, the deduction amount is fixed and not linked to the actual amount spent. A taxpayer can claim: 

• Rs. 75,000 for a dependent with at least 40% disability.

• Rs. 1,25,000 for a dependent with severe disability (80% or more). 

Even if the actual medical expenses are lower, the full deduction amount is allowed as long as Form 10 IA certifies the level of disability.

What is Section 80U?

Section 80U is applicable when the taxpayer himself or herself is a person with a disability. Unlike Section 80DD, where the expense is for a dependent, this section allows a fixed deduction to the disabled taxpayer. The quantum of deduction is the same: 

• Rs. 75,000 for a person with at least 40% disability.

• Rs. 1,25,000 for a person with 80% or more disability. 

The taxpayer must submit Form 10 IA as proof, and no deduction will be allowed if the medical certificate has expired. A renewed certificate must be attached with the return of income to continue claiming the deduction.

Medical Authorities for Issuing Form 10 IA

Form 10 IA must be signed and issued by: 

• A neurologist with an MD in Neurology (or paediatric neurologist for children), or

• A civil surgeon or chief medical officer of a government hospital. 

The form should include the name, age, gender, address, nature of disability, and the degree of disability. It should be properly signed by the authorised medical professional, with designation and hospital details.

Disabilities Covered Under Form 10 IA - Section 80DD Deduction

The following disabilities are covered for the purpose of Form 10 IA:

• Blindness: This includes total absence of sight or limited visual acuity despite corrective lenses.

• Cerebral Palsy: A condition affecting motor control and posture due to brain injuries occurring during developmental stages.

• Leprosy Cured: Individuals who have been cured of leprosy but suffer from physical deformities or sensory loss.

• Hearing Impairment: Loss of 60 decibels or more in the better ear in the conversational range of frequencies.

• Loco Motor Disability: Disabilities of bones or joints that restrict movement.

• Mental Illness: Any mental disorder excluding mental retardation.

• Low Vision: Visual impairment that remains even after standard correction.

• Multiple Disabilities: Combination of two or more disabilities as defined above.

Format and Details Required in Form 10 IA

Form 10 IA includes: 

• Name of the person with disability

• Age and gender

• Residential address

• Nature of disability and percentage

• Duration (whether permanent or temporary)

• Details of medical authority issuing the certificate

• Signature or thumb impression of the disabled person

• Date and place of issuance 

Validity of the Medical Certificate

If the disability is temporary, the certificate remains valid only for the period specified. A fresh Form 10 IA must be filed after expiry to continue claiming the deduction. For permanent disabilities, the form can be used for multiple assessment years.

Filing Procedure of Form 10 IA

Form 10 IA must be uploaded on the Income Tax e-filing portal to claim deductions. Here are the steps: 

• Login to the e-Filing portal at www.incometax.gov.in

• Go to e-File > Income Tax Forms > File Income Tax Forms

• Choose the tab "Persons without Business/Professional Income"

• Select Form 10 IA

• Choose the appropriate Assessment Year (e.g., AY 2024-25)

• Click on "Let's Get Started"

• Fill all required details and upload the certificate

• Preview and verify the information

• E-Verify using Aadhaar OTP, DSC, or EVC 

Once verified, the form is successfully filed and can be used as supporting evidence while filing the income tax return.

Section 80DD and Insurance Policies

Section 80DD also covers premiums paid towards specific insurance or deposit schemes for the maintenance of a disabled dependent. These include: 

• LIC’s Jeevan Aadhar Plan

• Unit Trust of India schemes

• Any scheme approved by the Central Board of Direct Taxes 

The plan must provide annuity or lump sum benefits for the dependent in the event of the death of the taxpayer. If the dependent passes away before the taxpayer, the payout amount becomes taxable in the hands of the assessee.

Nomination of Disabled Dependant

The taxpayer must ensure that the insurance policy nominates either the dependent or a trust/person acting on behalf of the dependent. If this condition is not met, the deduction may be denied. The payout structure should benefit the dependent in the long term.

When Deduction is Denied

No deduction under Section 80DD or 80U will be granted in the following cases: 

• If Form 10 IA is not submitted

• If the medical certificate has expired and no renewed certificate is attached

• If the taxpayer has already claimed deduction under another section (like 80U for the same dependent) 

It is important to renew certificates on time and ensure that proper documentation is submitted.

Difference Between Section 80DD and Section 80U

While both sections provide deductions for disability-related expenses, the key difference lies in who is disabled: 

• Section 80DD: Deduction for expenses on disabled dependents

• Section 80U: Deduction for self-disability of the taxpayer 

In both cases, Form 10 IA is mandatory, and fixed deductions are allowed irrespective of actual expense.

Conclusion

Form 10 IA - Section 80DD Deduction offers important financial relief for taxpayers supporting disabled dependents. It ensures that the burden of medical expenses and long-term care is eased through tax savings. Taxpayers should be aware of the requirements, validity, and documentation involved in claiming these deductions. Filing Form 10 IA accurately and timely is the key to availing benefits under Section 80DD and 80U. Always consult with Compliance Calendar LLP experts.

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FAQs

Q1. Who can claim deduction under Section 80DD of the Income Tax Act?

Ans. A resident individual or a Hindu Undivided Family (HUF) can claim a deduction under Section 80DD if they have incurred expenses for the medical treatment, training, or rehabilitation of a dependent with a disability. The dependent can be a spouse, child, parent, sibling, or any member of the HUF.

Q2. What is Form 10 IA and why is it necessary for Section 80DD?

Ans. Form 10 IA is a medical certificate issued by a certified medical authority confirming the nature and percentage of disability of a dependent or the taxpayer. It is a mandatory document required to claim deductions under Section 80DD or Section 80U. Without it, the Income Tax Department will not allow the deduction.

Q3. What are the deduction limits under Section 80DD?

Ans. The maximum deduction available under Section 80DD is Rs.75,000 for dependents with at least 40% disability. In case of severe disability (80% or more), the deduction increases to Rs.1,25,000. These are fixed amounts and are allowed irrespective of the actual expenses incurred.

Q4. How do I file Form 10 IA online on the income tax portal?

Ans. To file Form 10 IA, log in to the income tax e-filing portal. Navigate to e-File > Income Tax Forms > File Income Tax Forms. Choose Form 10 IA under “Persons without Business/Professional Income,” fill in the details, upload the signed certificate, and complete the e-verification using Aadhaar OTP, DSC, or EVC.

Q5. What types of disabilities are covered under Section 80DD and Form 10 IA?

Ans. Disabilities covered include blindness, cerebral palsy, leprosy cured, hearing impairment, loco motor disability, mental illness, low vision, autism, and multiple disabilities. The disability must be certified by a neurologist, paediatric neurologist, or a government hospital civil surgeon or CMO.

Q6. Is it necessary to renew Form 10 IA every year?

Ans. If the disability is permanent, Form 10 IA does not need annual renewal. However, if the certificate indicates a temporary disability that requires reassessment after a certain period, a new certificate must be obtained and submitted after expiry to continue claiming the deduction.

Q7. Can both Section 80DD and Section 80U be claimed for the same person?

Ans. No, both deductions cannot be claimed for the same person. If a dependent has claimed deduction under Section 80U for themselves, then the taxpayer cannot claim Section 80DD for that person. Only one deduction can be availed for a single disability case.

Q8. What happens if the disabled dependent dies before the taxpayer?

Ans. If the taxpayer has purchased an insurance or deposit plan for the benefit of the disabled dependent and the dependent dies before the taxpayer, the amount received from the scheme will be treated as income in the hands of the taxpayer and will be taxable in the year it is received.