Deduction Under Chapter VIA Amendment of Section 80DD as to Providing for Annuity During Lifetime of Dependant—Whether Applicable Retrospectively on Policies Taken Prior to 2014

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The Tax Publishers Income Tax--Deduction Under Chapter VI-A Amendment of Section 80DD as to Providing for Annuity During Lifetime of Dependant--Whether Applicable Retrospectively on Policies Taken Prior to 2014 CA. Nisha Bhandari The Finance Act, 2022, has amended section 80DD so as to allow the deduction under the said section also during the lifetime, i.e., upon attaining age of sixty years or more of the individual or the member of the HUF in whose name subscription to the scheme has been made and where payment or deposit has been discontinued. The issue as to whether the said amendment would be applicable retrospectively in respect of policies taken prior to 2014, has recently been decided by the Supreme Court in Ravi Agrawal v. UOI & Anr. 2024 TaxPub(DT) 4963 (SC). The present write up aims at analysing the impugned issue and the decision of the Supreme Court. 1. Deduction under section 80DD As per section 80DD straight forward deduction of Rs.75,000 shall be allowed in case any expenditure has been incurred for the medical treatment (including nursing), training and rehabilitation of a dependant with disability. Also, amounts paid or deposited under any scheme framed in this behalf by the LIC or any other insurer or the UTI for the maintenance of a dependent being a person with disability is eligible for such deduction of Rs.75,000. Further amount of deduction is not linked to the amount of expenditure incurred or amount paid to LIC, etc. Where the person is with severe disability the deduction shall be Rs. 1,25,000 instead of Rs.75,000 referred above. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

Income Tax--Deduction Under Chapter VI-A

Amendment of Section 80DD as to Providing for Annuity During Lifetime of Dependant--Whether Applicable Retrospectively on Policies Taken Prior to 2014

CA. Nisha Bhandari

The Finance Act, 2022, has amended section 80DD so as to allow the deduction under the said section also during the lifetime, i.e., upon attaining age of sixty years or more of the individual or the member of the HUF in whose name subscription to the scheme has been made and where payment or deposit has been discontinued. The issue as to whether the said amendment would be applicable retrospectively in respect of policies taken prior to 2014, has recently been decided by the Supreme Court in Ravi Agrawal v. UOI & Anr. 2024 TaxPub(DT) 4963 (SC). The present write up aims at analysing the impugned issue and the decision of the Supreme Court.

1. Deduction under section 80DD

As per section 80DD straight forward deduction of Rs.75,000 shall be allowed in case any expenditure has been incurred for the medical treatment (including nursing), training and rehabilitation of a dependant with disability. Also, amounts paid or deposited under any scheme framed in this behalf by the LIC or any other insurer or the UTI for the maintenance of a dependent being a person with disability is eligible for such deduction of Rs.75,000.

Further amount of deduction is not linked to the amount of expenditure incurred or amount paid to LIC, etc.

Where the person is with severe disability the deduction shall be Rs. 1,25,000 instead of Rs.75,000 referred above.