Deductions for Differently Abled Persons – Income Tax
Deductions for Differently Abled Persons – Income Tax
Deductions for differently-abled persons are incorporated into the Income Tax Act to provide a tax incentive for people with disabilities. Section 80U and 80DDB provide tax benefits to individuals and their family members with disabilities. An individual suffering from disability obtains a tax benefit under Section 80U while an individual gets tax benefits under Section 80DDB if any dependent family member of the individual is suffering from a disability.
Disability under Section 80U
Disabilities are defined in The Persons with Disability (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995. Persons suffering from any of the following kinds of disabilities as certified by a medical authority qualify for a tax deduction as per Section 80U. The following disabilities are eligible to claim a deduction under the Act:
- Blindness
- Low vision
- Leprosy-cured
- Hearing impairment
- Loco motor disability
- Mental retardation
- Mental illness
- Autism
- Cerebral palsy
Eligibility
Tax benefit can be availed by any resident individual who is certified as a differently-abled person with any of the above disabilities by the competent medical authority. The following kinds of medical authorities are competent to certify a person to be disabled:
- A Civil Surgeon or Chief Medical Officer (CMO) of a government hospital.
- A Neurologist with an MD qualification in Neurology
- In the case of children, a Paediatric Neurologist having a degree equivalent to MD
Deduction limit
For deduction under section 80U, individuals or persons with disability are categorized into two types:
Person with Disability
A person with a disability means the person is suffering from 40% of disability. If a person has at least forty percent of a disability then the assessee is eligible for a deduction of seventy-five thousand rupees.
Person with Severe Disability
A person with severe disability means a person who suffers from at least eighty percent of disability. Such a person is eligible for a deduction of one lakh and twenty-five thousand rupees.
Disability under Section 80UDDB
As per section 80DDB of the Income Tax Act, a differently-abled person can claim deductions for medical expenses either for himself or dependents. The dependents can be the taxpayer’s spouse, parents, children or dependent siblings. The assessee can claim a deduction, if the assessee is a resident, individual or part of a Hindu Undivided Family. It is mandatory that a person should be a resident of India for a given financial year for claiming the deduction.
Eligibility for Deduction under Section 80DDB
- Tax deduction under section 80DDB is available to all resident individuals as well as HUFs.
- However, the benefit of the deduction is not available to Non-Resident Indians (NRIs).
- In case the assessee is an individual, he can claim a tax deduction if he incurred expenses for his own treatment or treatment of a dependent.
- In case the assessee is a HUF, the HUF can claim a tax deduction for the expenses incurred in the treatment of any member of HUF.
Section 80DDB Deduction Limit
A person can claim the deduction, for the actual expenses on the treatment, up to Rs. 40,000. However, the amount of deduction varies for different age groups. For senior citizens, aged sixty to eighty years, the benefit extends up to Rs 60,000 for medical expenses. For those aged above eighty years, the limit is up to Rs 80,000.
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