Tax benefits available to resident disabled individuals and their caretakers

Taxes

oi-Roshni

By Roshni Agarwal

Published: Thursday, February 27, 2014, 14:01 [IST]

The cost of healthcare has risen sharply in the last few years and recognizing the regular health care need of disabled individuals, tax authority in India has provided some of the tax reliefs to the disabled or even their caretakers or guardians under different sections of the Income Tax Act:

Section 80DD and Section 80U: For any medical expenses incurred by the caregiver for the rehabilitation or treatment of the dependent disabled individual, a tax deduction of the maximum amount of Rs. 50,000 (40% disability) or in case of severe disability to the maximum of Rs. 1,00,000 (80% or more) can be claimed by the individual under section 80 DD. The deduction to this effect can even be claimed by an Hindu Undivided Family (HUF). But for being eligible to claim, you need to ensure that the medical certificate of the disabled dependent stands valid.

And also, the provisions provided under Section 80U and Section 80DD in respect of medical expenses incurred on disabled can only be claimed once at a time implying in the case when the disabled has already claimed the tax benefits for his total income under section 80U, claim by the guardian for such a tax benefit cannot be made.

Section 80DDB: For expenses incurred in respect of some of the specific diseases including cancer, chronic kidney illness, AIDS, neurological issues and hematological disorders among others, individuals can claim the deduction under the section. Accordingly, a claim to the extent of Rs. 40,000 or Rs. 60,000 ( in case of senior citizens) or the actual medical cost is allowed to be claimed for deduction.

Nonetheless, if the employer provides some reimbursement for the incurred medical expenses that has to be accounted for while arriving at the final deduction.

Other Benefits :

Doubled Transportation Allowance: The allowance for transportation provided to employees in a general case is tax-exempt. But as an advantage to the disabled individuals, the amount of such allowance for individuals with orthopaedic or visual impairment is doubled.

Purchase of any single premium insurance policy or subscription to any of the scheme for meeting the financial needs of dependent also qualifies for tax deduction.

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