Special Deduction for the Disabled

Recognising the special needs of the physically and mentally disabled, the Indian income tax law provides relief to such persons (under section 80U)and also to those who actually incur expenditure on the treatment and maintenance of such persons (under section 80DD).

The disabled person is eligible for a deduction of up to Rs. 50,000 from his/her net taxable income. If the disability is severe (80% or more), this relief is extended up to Rs. 75,000. Of course, the disabled person has to file his return along with a certificate from a recognised medical practitioner declaring his disability. The taxpayer must ensure that this certificate is valid, because there are cases where the disability is likely to subside after a certain number of years. In such cases, the certificate is issued with a limited validity. Also, the certificate must be in the prescribed format, i.e. Form 10-1A. It may be noted that this relief is extended not only to physically disabled persons but also to mentally disabled persons.

The same extent of relief is available to you (as an individual or as a member of an HUF, if that is the case) if you incur expenses on the treatment and maintenance of such a disabled person. The condition is that the disabled should be dependent on you. “Dependent” includes spouse, children, parents, brothers and sisters and, for an HUF, any member of the HUF.

Note that either the disabled himself can claim the deduction or the person on whom s/he is dependent. But both cannot claim it. There are also certain schemes approved by the Central Board of Direct Taxes (CBDT) and brought out by LIC and some other insurance companies, where you can claim such a deduction, even though they are, as such, not covered under Section 80DD of the Income Tax Act.