Income Tax Deductions for Differently-Abled Persons
The Indian government provides several tax provisions for differently-abled persons under certain sections of the Income Tax Act. With the tax provisions, a disabled individual can avail of tax benefits and get a certain amount of exemption on their expenses. But there are various criteria and exclusions for claiming the income tax exemption, so let’s understand the provisions in detail.
Tax Provisions for Disabled Person
1. Tax Exemption under Section 80DDB
The income tax deduction under Section 80DDB, you or your dependent can claim the expenses of the treatment of specific ailments. The claim amount depends on the severity of the disability and the expenses borne by you. You need to submit a certificate of the disease from a doctor practicing at a private or government hospital. Individuals and HUFs (Hindu Undivided Family) are eligible for such an income tax deduction.
The conditions covered under the disability provision are aphasia, ataxia, AIDS, dementia, Parkinson’s, dystonia musculorum deformans, cancers, motor neuron disease, hematological disorders and renal failure among others. For people below the age of 60 years, the income tax deduction amount is capped at INR 40,000.
2. Tax Exemption under Section 80U
Section 80U allows the disabled person to claim tax benefits. If the tax exemption is claimed under Section 80U then no other family member can claim an exemption under Section 80DD. Section 80U and Section 80DD which are tax provisions for disabled people are similar to each other but differ only on the aspect of who can claim the tax exemption.
The disabilities covered under the tax provision are low vision, blindness, cerebral palsy, locomotor disability, leprosy-cured, hearing impairment, autism, mental retardation, mental illness, and multiple disabilities. The deduction amount allowed under Section 80U depends on the percentage of disability, where the person can claim the below-given amount even if the expenses don’t add up to the capped limit:
- Where the disability is 40 per cent or more but less than 80 per cent, an amount of INR 75,000 can be claimed per financial year
- Where the disability is more than 80 per cent, the person can claim INR 1.5 lakh
3. Tax Exemption under Section 80DD
The individual who has borne the expenses of the dependent member with a disability can claim a tax exemption for disabled persons. Under Section 80DD, the deduction can only be claimed if the dependent is suffering from a disability, cerebral palsy, autism or multiple disabilities. The percentage of disability should not be less than 40 per cent to be eligible to claim the exemption. For claiming an income tax deduction for severe disability, the percentage of it should not be less than 80 per cent.
The disabilities covered under Section 80DD are the same as the ones covered under Section 80U. Also, the amount of deduction allowed under Section 80DD is the same as the amount given under Section 80U.