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Income Tax Exemption for Disabled

  • 27th Jan 2020
  • 959
Income Tax Exemption for Disabled

Just like there are tax benefits for investments, you can also avail certain benefits as a differently-abled individual under particular tax provisions. Depending on the section which covers your disability and the percentage of it, you can get income tax exemption on the medical expenses, rehabilitation, and such payments. So, let’s take a look at the different tax provisions made available by the government.

1. Income Tax Exemption under Section 80DDB

Individuals and HUFs (Hindu Undivided Family) are eligible for the income tax deduction under Section 80DDB. The expenses of the treatment of specific ailments can be claimed by you or your dependent. The amount of deduction that can be claimed depends on whether the disability is minor or significant 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.

The diseases covered under disability tax exemption are aphasia, ataxia, AIDS, cancers, dementia, dystonia musculorum deformans, motor neuron disease, Parkinson’s, hematological disorders and renal failure among others. For individuals below the age of 60 years, the amount of tax exemption for disabled is capped at INR 40,000.

2. Income Tax Exemption under Section80U

Section 80U allows the individual who is disabled to claim tax benefits. If the differently-abled person is claiming the tax exemption then no other family member can claim the tax benefit under Section 80DD. This because Section 80U and Section 80DD are almost similar but differ only on the aspect of who can claim the tax benefit.

The disabilities covered under this tax provision are low vision, blindness, leprosy-cured, locomotor
disability, hearing impairment, mental retardation, autism, mental illness,
cerebral palsy and multiple disabilities. The amount of deduction allowed under
Section 80DD depends on the percentage of disability, where the individual can
claim the below-given amount even if the expenses don’t sum up to the capped
limit.

  • 40 percent or more but less than 80 percent of disability can claim INR 75,000 per financial year
  • More than 80 percent disability, the individual can claim INR 1.5 lakh

3. Income Tax Exemption under Section80DD

Under Section 80DD, disability tax exemption can be claimed by an individual who has borne the expenses of the dependent member having a disability. The tax exemption for disabled can only be claimed if the dependent is suffering from a disability, cerebral palsy, autism or multiple disabilities. The percentage of it should not be less than 40 percent to be eligible for such a deduction. And in the case of claiming for severe disability, the percentage of it should not be less than 80 percent.

The disabilities covered under Section 80DD of disability exemption in income tax are the same as the ones covered under Section 80U. The amount of deduction allowed under Section 80DD is also the same as the amount given under Section 80U.

With the help of these tax provisions, you can claim tax deductions on your expenses. It also allows the person bearing the expenses to claim the amount and reduce their taxable income.

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