Tax Benefits for the Differently-Abled in India

As per the government data, around 2.21% population of India is differently-abled. In light of the hardships and difficulties that this group has to face in life, the government has extended a number of benefits for the same, one of which comes under the Income Tax Act.

Individuals who are differently-abled are allowed to avail tax relief as per the section 80DD and Section 80U of the Income Tax Act. But first, let’s understand what types of conditions are recognized by the Income Tax Act for these benefits. These are: mental retardation, mental illness, blindness, leprosy-cured, locomotor disability, and hearing impairment.
A disabled person is also divided into two categories, which affect the amount of tax deduction allowed. These are:

• Disabled- An individual with 40% or more of one or multiple types of disabilities
• Severely disabled- A person with 80% or more of one or multiple types of disabilities

Tax Benefits Under Section 80DD

Section 80DD allows an individual to claim a tax deduction when a member of their family is differently-abled. The relaxation is granted in respect of the maintenance of the differently-abled including medical treatments, nursing, rehabilitation, etc. The following are the two types of deductions allowed:

• Up to Rs. 75,000 for a person with disability
• Up to Rs. 1,25,000 for a person with severe disability

Note: The income tax filer must also furnish appropriate medical certificates to back the claims.

Tax Benefits Under Section 80U

A differently-abled person can claim tax benefits for their own IT return under Section 80U. The deductions are capped at the same amounts as under Section 80DD, i.e., up to Rs. 75,000 for the disabled, and Rs. 1,25,000 for the severely disabled.

The main difference between the tax benefits under the two sections is that under Section 80U, the person can get a deduction for just being “disabled”, while under section 80DD, the benefit is granted on the basis of the healthcare expenses incurred.

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