My daughter is autistic and has a disability certificate. We are NRIs and plan to move back to India next year. Are there any tax deductions I can claim for her treatment and care once I move back?
Under Section 80DD of the Income-tax Act, 1961, an individual qualifying as ‘resident’ in India may claim deduction for expenditure incurred for medical treatment (including nursing), training and rehabilitation of a ‘dependant’ (being a person with disability which includes an autistic) from his taxable income. The term ‘dependant’ includes spouse, children, parents, brothers and sisters of the individual.
The following conditions should be satisfied to claim the deduction:
a. The dependant is wholly or mainly dependant on the individual claiming the deduction.
b. Certificate in Form 10-IA is issued by:
i) A neurologist having a degree of Doctor of Medicine (MD) in neurology (in case of children, a paediatric neurologist having an equivalent degree); or
ii) A civil surgeon or chief medical officer in a government hospital in India.
The deduction available is ₹ 75,000, irrespective of the amount of expenditure incurred. In case of a person with severe disability (disability of 80% or more), the deduction available is ₹ 1,25,000.
In your case, once you qualify as ‘resident’ in India, you may claim deduction for medical expenditure incurred for your daughter as per the above mentioned limits provided you obtain a certificate in Form 10-IA.
Can NRIs claim deduction for paying health insurance premiums in India?
Under Section 80D of the Income-tax Act, 1961, an individual may claim deduction for medical insurance premium paid in India, medical expenditure incurred and amount paid on account of preventive health check-up. The deduction for health insurance premium paid is as follows:
a. Medical insurance premium paid by the individual for the benefit of self, spouse and dependant children up to ₹ 25,000; and b. Medical insurance premium paid by the individual for the benefit of parents of the individual up to ₹ 25,000.
In case the medical insurance premium has been paid for the benefit of a senior citizen (aged 60 years or more), the deduction available under each category is up to ₹ 50,000. Accordingly, an individual, irrespective of his/her residential status in India, can continue to claim deduction from taxable income in India up to the monetary limits specified above for medical insurance premium paid.
Sonu Iyer is tax partner and people advisory services leader, EY India. Queries at email@example.com