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80DD confusion on tax exemption for annuity purchase for married sister

Date: 30 Jan 2016    Group: Finance and Investments    Category: Tax Planning   

This query is on behalf of my friend: "Can I be eligible to buy 80DD based premium from authorized company like LIC for my married sister(who is suffering from blindness) and claim such benefit ? "
Here are the two scenarios for which I seek answer
A - "if his sister is married and living with her husband."
B - "if his sister was married and now divorced"

Confused about 80Dd IT exemption for your married sister? Dispel your confusion with advice from our Income Tax experts.

Author: Gopal Somani    26 Sep 2016      Member Level: Bronze     Points : 3  (Rs 3)    Voting Score: 0

As per Section 80DD of Income Tax Act Provides Deduction in respect of maintenance including medical treatment of a dependent who is a person with disability.

As per the Act dependent includes spouse, son or daughter (or any child), parents as well as brother or sister i.e. any siblings can be considered as your disabled dependent. But the condition is that the person should be wholly or mostly dependent on you for his/her support and maintenance.

Eligible Expenditure are Any expenses incurred for medical treatment which includes nursing, training as well as rehabilitation of dependent that is disabled. The amount paid towards Life Insurance Corporation (LIC), Unit Trust of India or any of the other insurers for the sole purpose of buying specified schemes or insurance policies to help in the maintenance of a dependent with disabilities.

Blindness is included as disability for section 80DD

So in your case -

A - "if his sister is married and living with her husband." - She is not directly dependent on you, so you can't take the deduction.

B - "if his sister was married and now divorced" - In this case if she is not earning then she is dependent on you. You can claim the deduction.

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