The existing provisions of section 80DD of the Income tax Act, 1961, inter alia, provide for a deduction to an individual or HUF, who is a resident in India, who has incurred-

(a)   Expenditure for the medical treatment (including nursing), training and rehabilitation of a dependant, being a person with disability as defined under the said section; or

(b)   Paid any amount to LIC or any other insurer in respect of a scheme for the maintenance of a disabled dependant.

The section presently provides for a deduction of fifty thousand rupees if the dependant is suffering from disability and one lakh rupees if the dependant is suffering from severe disability (as defined under the said section).

Similarly, the existing provisions of section 80U, inter alia, provide for a deduction to an individual, being a resident, who, at any time during the previous year, is certified by the medical authority to be a person such disability as defined under the Explanation to Sub-section (1).

The section 80U provides for a deduction of fifty thousand rupees if the person is suffering from disability and one lakh rupees if the person is suffering from severe disability as defined under the Explanation to Sub-section (1).

The limits under section 80DD and section 80U in respect of a person with disability were fixed at fifty thousand rupees by Finance Act, 2003. Further, the limit under section 80DD and section 80U in respect of a person with severe disability was last enhanced from seventy five thousand rupees to one lakh rupees by Finance (No.2) Act, 2009.

In view of the rising cost of medical care and special needs of a disabled person, it has been proposed to amend both the section 80DD and section 80U so as to raise the limit of deductions as under:

Revised Limit of Deductions	Section 80DD	Section 80U
Person with disability	75000	75000
Person with Severe disability	100000	125000

These amendments will take effect from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016-17 and subsequent assessment years.

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