December 3 is celebrated as the International Day of Persons with Disabilities to promote and support the rights and welfare of people with disabilities and rightly so. Living with disabilities or providing maintenance and medical treatment for a disabled family member can take not only an emotional but financial toll as well. In order to reduce the financial burden, certain Concession Provided to persons with disabilities and persons supporting persons with disabilities under Income Tax (IT) laws.
Shailesh Kumar, Partner, Nangia & Co LLP explains how the IT department defines disability. “As per clause (i) of section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995, disability refers to people with ‘autism’, ‘cerebral palsy’ and ‘multiple disability’. Autism “In clauses (a), (c) and (h) of section 2 of the National Trust for the Welfare of Persons with Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 (44 of 1999),” he said.
for disabled taxpayer
A person with at least 40% disability can claim a flat tax deduction 75,000 at the time of filing the same income tax return (ITR). Deduction for people with severe disabilities, defined as having a disability of 80% or more 1.25 lakh is available.
Section 80U provides this tax benefit to persons who are certified by a medical authority as a person with disability. The taxpayer is only required to submit a disability certificate issued by a recognized authority as stated in Form 10-IA. No other documents or medical bills need to be submitted while claiming the deduction.
for disabled dependents
Section 80DD provides tax deduction to persons who pay for the maintenance and medical treatment of a disabled member in the family. The amount of deduction is same as in section 80U; flat cut of 75,000 if the severity of disability of the dependent is between 40% to 80% and if it is more than 80%, the caretaker taxpayer can claim 1.25 lakh deduction.
These are flat deductions and can be claimed in full irrespective of the actual amount spent on the medical treatment of the disabled dependent. It is available for individual and HUF taxpayers.
Separately, section 80DD gives relief from addition of income provision under section 64 which mandates addition of income from investments made in the name of a dependent child or spouse to the total income of the taxpayer for taxation purposes.
“In a case where a minor child of a person is suffering from a disability specified in section 80U of the Income Tax Act, 1961, any income earned by such minor child shall not be added to the income of the parent,” Kumar said.
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