Income tax deductions for a disabled person

Disabled person: Who can claim benefits

Before we move ahead with the provisions available for income tax deductions for disabled persons, let’s first understand who can claim benefits under these sections. Section 80U of the Income Tax Act gives the deductions for a  person with disability.:¹

 

1. Any resident of India who has a valid medical certificate issued from a competent medical authority showcasing their disability.¹
2. To claim benefits under section 80U of the Income Tax Act, it is important that the individual has at least 40% disability as per their medical certificate.¹
3. The scope of disability under section 80U of the Income Tax Act has been kept broad as it includes:
   • Low vision
   • Blindness
   • Leprosy-cured
   • Hearing impairment
   • Mental retardation
   • Mental illness
   • Locomotor disability.¹
4. Additionally, remember that section 80U also defines severe disability where an individual has 80% or higher disability according to their medical certificate. These disabilities include autism, cerebral palsy, etc.

Income tax deductions for disabled persons

 

Now that you have a fair understanding of who falls under the category of a ‘disabled individual’, let’s check the deductions that a disabled person can claim under the Income Tax Act:¹

 

1. Tax exemptions under section 80U

   ¹  

   In addition to defining who can claim deductions under this section, section 80U also says that to claim deductions under this section, the taxpayer must have at least 40% disability. These deductions are allowed for expenses incurred on medical and maintenance needs of the taxpayer. Here’s the quantum of tax deductions allowed under this section:

   • Upto ₹75,000 for a person with disability .
   • Upto ₹1,25,000 for a person with severe disability.

2. Tax exemptions under section 80DD

   ¹  

   Under section 80DD of the Income Tax Act, any individual who is a resident of India or HUF can claim deductions for their disabled dependents. These deductions are applicable  if a taxpayer deposits a specified amount as an insurance premium for taking care of his/her dependent disabled person. insurance premium. Similar to section 80U, under this section also, the dependent must have at least 40% disability and the quantum of tax deductions allowed are:

    

• Upto ₹75,000 for a person with disability .
• Upto ₹1,25,000 for severe disability.

 

Difference between section 80U and section 80DD?

²  

Section 80U and Section 80DD are both meant to make deductions for disabled individuals. The major difference between them is that Section 80U is for the taxpayer, who is an individual with disability. On the other hand, Section 80DD exemptions are for taxpayers who are taking care of a dependent with a disability. This includes if the taxpayer is paying the medical expenses or the insurance premium for a  dependent, which could be their parents, spouse, siblings, children or a member of the HUF (Hindu Undivided Family).¹

   

Simply put, if someone is bearing the expenses for their dependent family members, they can claim tax benefits under section 80DD. However, you will not be able to take the tax benefits under section 80U. Also, note that both deductions are not to be claimed at the same expense. If you are suffering from a disability and are claiming a deduction under 80U, then your caretaker can not get tax benefits under 80DD for your caretaking.²

   

How do you claim tax deductions for disabled people?

 

Any person who meets the eligibility criteria as discussed above can claim deductions under the Income Tax Act. However, it is important that you be aware of the required deduction process documents, etc., to avoid any hassle.

 

Here’s everything you need to know about claiming tax deductions for disabled people: ¹

 

FAQs:

References

1 https://cleartax.in/s/section-80u-deduction#:~:text=What%20is%20the%20amount%20of,deduction%20is%20Rs%201%2C25%2C000.

2 https://economictimes.indiatimes.com/wealth/tax/save-income-tax-with-medical-expenses-claim-deduction-while-filing-itr-u/s-80dd-and-80u-on-treatment-cost-of-a-disabled-person/articleshow/111685622.cms?from=mdr