More often persons with disability are not aware of tax deductions available to them. Due to which they end up paying more tax than the actually liability.
Below in this article, we have discussed different tax deduction provisions applicable to disabled persons in India.
In case of any doubt, we request you to use our comment section below for posting your queries and feedback.
Fixed Deduction for a Disabled Person – Section 80U
Section 80U allow a disabled person to claim a flat deduction of Rs. 75,000 for having disability of at least 40%.
If the disability is 80% or more, then the disabled person will be eligible for a higher fixed deduction of Rs. 1,25,000 under section 80U.
This means, if the disability is more than 40% and up to 80%, you can claim tax deduction of Rs. 75,000 under section 80U.
To avail such benefit, the disabled person has to get a medical certificate from the medical authority certifying his or her disability.
If the certificate needs renewal then it has to be renewed for respective financial year to extend the benefit.
The disabled person has to be resident in India. Foreign citizen being a resident of India can take benefits of section 80U.
Tax Deduction of medical expenses spent for a disabled person – Section 80DD
If a disabled person is your dependent spouse, child, brother and sister or parents and you have incurred medical expenses for their treatment, then that amount will be eligible for tax benefits under section 80DD.
Please note the difference between Section 80U and 80DD.
In section 80U, the dependent person himself is allowed to claim tax deduction. In section 80DD, if a person has any dependent relative, then amount spend towards medical expenses of such relative is allowed as tax deduction.
Similar to section 80U, under section 80DD you are also eligible for flat or fixed deduction of Rs. 75,000 if the dependent has less than 80% disability.
If the dependent has 80% or more disability, then tax deduction under section 80DD is Rs. 1,25,000.
Money paid or deposited with any insurer for the benefit of a disabled dependent will also be eligible for tax benefits under section 80DD.
To claim tax deduction under this section, the person has to get a medical certificate from the medical authority stating the disability in it.
Tax deduction for Specified Illness – 80DDB
Specified illness such as neurological disorders, cancer, AIDS, chronic kidney failure and hematological disorders are eligible for Section 80DDB benefits, if assessee has spent any money for the treatment of these diseases.
If you have spent money towards medical expenses of specified illness for your own treatment or treatment of your dependent spouse, child, parents, brothers and sisters, then you will be eligible to take benefit section section 80DDB.
Under section 80DDB, amount spent towards medical expenses or Rs. 40,000 whichever is lower will be allowed as income tax deductions.
If the person for whom money has been spent is a senior citizen then tax deduction limit will go up to 60,000 rupees. In case of very senior citizen, deduction is Rs. 80,000 or amount spent whichever is less.
To claim tax deduction under section 80DDB, you are required to get a certificate from a doctor working in government hospital in the specified format.
If a disabled person is working in an organization as an employee, then in addition to above benefits, he is also eligible for exemption on transport allowance. In this case, Rs. 1600 per month is allowed as exemption from the transport allowance received.
The net amount left out after deducting 1600 rupees per month will be taxable in the hands of disabled person.
