Income Tax Act Extracts
Section 80DD

Deduction in respect of maintenance including medical

1. Where an assessee, who is a resident in India, being an individual or Hindu undivided family has, during the previous year:
   1. Incurred any expenditure for the medical treatment (including nursing), training and rehabilitation of a handicapped dependant; or
   2. Paid or deposited any amount under a scheme framed in this behalf by the Life Insurance Corporation or Unit Trust of India subject to the conditions specified in sub-section (2) and approved by the Board in this behalf for the maintenance of handicapped dependant. The assessee shall in accordance with and subject to the provisions of this section, be allowed a deduction of a sum of forty thousand rupees in respect of the previous year.
      
      
2. The deductions under clause (b) of sub-section (1) shall be allowed only if the following conditions are fulfilled, namely:
   1. The scheme referred to in clause (b) of sub-section (1) provides for payment of annuity or lump sum amount for the benefit of a handicapped dependant in the event of the death of the individual or the member of the Hindu undivided family in whose name subscription to the scheme has been made;
   2. The assessee nominates either the handicapped dependant or any other person or trust to receive payment on his behalf, for the benefit of the handicapped dependant.
      
      
3. If the handicapped dependant predeceases the individual or the member of the Hindu undivided family referred to in sub-section (2) an amount equal to the amount paid to be deposited under clause (b) of sub-section (1) shall be deemed to be the income of the assessee of the previous year in which such amount is received by the assessee and shall accordingly be chargeable to tax as the income of the previous year.
   
   
4. In this section,

1. "Government hospital" includes a departmental dispensary whether full-time or part-time established and run by a Department of the Government for the medical attendance and treatment of a class or classes of Government servants and members of their families, a hospital maintained by a local authority and any other hospital with which arrangements have been made by the Government for the treatment of Government servants;
   
   
2. "handicapped dependant" means a person who -
   1. is a relative of the individual or, as the case may be, is a member of the Hindu undivided family and is not dependant on any person other than such individual or Hindu undivided family for his support or maintenance; and
   2. is suffering from a physical disability (including blindness) or is subject to mental retardation, being a permanent physical disability or mental retardation specified in the rules 8 made by the Board for the purposes of this section, which is certified by a physician, a surgeon, an oculist or a psychiatrist, as the case may be, working in a Government hospital, and which has the effect of reducing considerably such person's capacity for normal work or engaging in a gainful employment or occupation;
      
      
3. "Life Insurance Corporation" shall have the same meaning as in clause iii) of sub-section 8) of section 88;
4. (Unit Trust of India" means the Unit Trust of India established under the Unit Trust of India Act, 1963 (52 of 1963).