• Kandivali West Mumbai 400067, India
  • 022 39167251
  • support@email.com
May 15, 2021

Know the various deduction under Income Tax Act for Persons with disability in India

by Mahesh Mara in Income Tax

Know the various deduction under Income Tax Act for Persons with disability in India

A disability is any condition of the body or mind that makes it more difficult for the person with the condition to do certain activities and interact with the world around them. The term is used to refer to individual functioning, including physical impairment, sensory impairment, cognitive impairment, intellectual impairment mental illness, and various types of chronic disease.

The Income Tax law of India provides tax benefits to individuals if either they or any of their family members are suffering from certain disabilities. Section 80U offers tax benefits if an individual suffers a disability, while Section 80DD offers tax benefits if an individual taxpayer’s dependent family member(s) suffers from a disability. This article is let us learn the tax benefits available under Section 80U and 80DD.

Deduction under Section 80DD

Deduction under section 80DD of the income tax act is allowed to Resident Individuals or HUFs for a dependant-who suffering from a disability and is wholly dependent on the individual (or HUF) for the medical treatment, support and maintenance.

Who is eligible to claim deduction under Section 80DD?

Disability for Section 80DD is defined under section 2(i) by the “Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995” as well as disabilities includes in clauses (a), (c) and (h) of section 2 of National Trust for welfare of Person with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999. This includes the following disabilities:

  • Cognitive or severe mental disabilities
  • Low vision
  • Blindness
  • Leprosy-cured
  • Hearing impairment
  • Locomotor disability
  • Mental illness
  • Autism
  • Cerebral palsy
  • Or Multiple disabilities

The person must not suffer less than 40% of any of the above disabilities. When it comes to severe disability 80% or above, one or more of the mentioned illnesses or disabilities is considered.

What is the quantum of deduction under Section 80DD?

  • A dependant person with disability is one who has at least 40% of any of the specified disability – The family member who takes care of the medical charges of the dependant person with disability can claim tax deduction of up to Rs. 75,000.
  • A dependant person with severe disability is one who has at least 80% of any disability – The family member handling the medical expenses of dependant person with severe disability can claim tax deduction of up to Rs. 1,25,000.

Note:

  • Assessee should incur expenses on medical treatment or deposit any amount for maintenance of such handicapped dependent relative in order to claim deduction under 80DD
  • Relative for 80DD include:

a. Individual: Spouse, Mother, Father, Brother, Sister, Children

b. HUF: Any member of HUF

Deduction with respect to disabled person- Section 80U

Section 80U of the Income Tax Act, 1961 provides for tax deduction benefit to individual taxpayers suffering from a disability. In order to claim tax deduction under section 80U, the individual must be certified as a person with a disability by appropriate medical authority.

Who can claim deduction under Section 80U?

Individuals suffering from any of the following ailments with minimum 40% impairment will be considered as disabled to claim deduction under Section 80U:

  • Blindness
  • Low vision
  • Leprosy-cured
  • Hearing impairment
  • Loco motor disability
  • Mental retardation
  • Mental illness

The section also provides a definition for a severe disability which refers to a condition where the disability is 80% or more. Severe disability also includes multiple disabilities, autism and cerebral palsy.

What is the limit of deduction under Section 80U?

  • If a person is suffering from at least 40% disability, he/she can claim a tax deduction upto Rs.75,000
  • Person with Severe Disability: If a person is suffering from severe disability i.e suffering 80% disability (either from one or multiple ailments) can claim a tax deduction up to Rs. 1,25,000 lakh

Enter your email address:

Subscribe to faceless complainces