Tax benefits for people with disabilities in India

Sushila wrote the following last week:

Sushila June 27, 2013 at 4:33 pm [edit]

Request some write-ups for the people with disabilities; What special benefits are available to them and how should they go about it? for e.g Taxation (Professional/Income/Gift/Service) Medical (Free/subsidized/special cases) Travel (Concessions/special arrangements) Education (concessional loans/subsidy/courses/institutions) Housing….. Investments….. Banking……. There are many disables who do not know their rights and hence struggle in life, we hear and read a lot about senior citizens.

Since I know a little bit about taxation, I’m going to start with taxation in this post. Unfortunately, there aren’t as many tax benefits for people with disabilities as one would like, but there are still one or two. In a country where only 3% of the populace pays taxes, you wonder if it is really necessary to make people with disabilities pay taxes, but that’s a topic for another day. In this post I’m going to list out a few tax deductions for people with disabilities that I’m familiar with.

Section 80U – Deduction for Persons with Disabilities

Section 80U is only for persons with disabilities and not for parents or spouses whose dependents have disabilities. 80U allows a person to deduct either Rs. 50,000 or Rs. 100,000 from your taxable income. Persons with disabilities will get a deduction of Rs. 50,000 and persons with severe disabilities will get a deduction of Rs. 1,00,000. This link has a list of the description of each kind of disability. 

Section 80DD

(The following text is from an old post.)  This is a deduction in respect of maintenance including medical treatment of handicapped dependent that is a person with a disability. It is available to individuals and HUFs (Hindu Undivided Families). In the case of an individual the deduction is available to spouse, children, parents brothers or sisters of the individual. In the case of HUF the deduction is available to any member of the HUF. The second condition is that the disabled person should be wholly or mainly dependent on the person seeking the deduction for their support and maintenance. The dependent should have a disability of at least 40%, and for claiming the deduction the assessee has to furnish a copy of certificate issued by the medical authority There are two ways in which the expenses could have been incurred:

Option 1 Option 2
The taxpayer has incurred an expenditure for the medical treatment, training, nursing and rehabilitation of the dependent The taxpayer has paid/deposited under any scheme framed in this behalf by the LIC or any other insurer or the administrator or specified company and approved by the Board in this behalf, for the support/maintenance of the dependent

Amount of deduction eligible under Section 80DD: 1. Fixed deduction of Rs 50,000/- is allowed irrespective of amounts incurred in Option 1/2 2. Deduction of Rs. 1,00,000/- is allowed in case where the dependent has the disability of more than 80% If the dependent predeceases the Individual/HUF, an amount equal to the amount paid shall be deemed to be the income of the individual/HUF and will be chargeable to tax

Details on Section 80DDB

This deduction is in respect of medical treatment of a specified disease or ailment as prescribed by the Board. 80DDB deductions are also available to individuals or HUFs and are available for expenditure incurred in respect of assessee himself or his dependent spouse, children, parents, brothers/sisters. In order to get 80DDB deduction the assessee has to submit a certificate in the prescribed form from a neurologist, oncologist, urologist, haemotologist, immunologist or such other specialist as prescribed working in a government hospital. Amount of Deduction under 80DDB: Actual amount paid or Rs 40,000/-, whichever is lower In case the amount incurred is in respect of a person who is a Senior citizen then: Actual amount paid or Rs 60,000/-, whichever is lower I am not aware of any other tax deduction available to people with disabilities and if you know of any more then please leave a comment and I’ll include this in the post. Also, if you have any ideas for the other questions that Sushila has asked, please do leave a comment.

One thought on “Tax benefits for people with disabilities in India”

  1. My wife is a breast cancer patient who is operated upon and taking cancer medication S and periodical checkups viz.,mammography.ct scan etc,.I have also taken a medical insurance policy for her.Kindly let me know what tax rebates are applicable for me and how to claim them.

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