The physically disabled and mentally disabled persons have certain special needs. Recognizing this fact, the Indian income tax laws provide relief (under section 80U) to such persons and also to those who incur expenditure on the treatment and maintenance of these persons (under section 80DD).

The disabled individual taxpayer 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 to Rs. 75,000. Of course, s/he must file the tax return along with a certificate from a recognised medical practitioner declaring such disability. The taxpayer should ensure that the certificate is valid, as in many cases, the disability is likely to subside after a certain number of years. In such cases, the certificate is issued with a limited validity. The certificate should also be in the prescribed format (i.e. Form 10-1A). Note that this relief is extended not just to individuals who are physically disabled but also to individuals who are mentally disabled.

The same extent of relief is available to you as an individual if you incur expenses on the treatment and maintenance of such a disabled person. Of course, the disabled should be dependent on you. A “dependent” can be the spouse, children, parents, brothers and sisters.

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 such schemes are not covered under Section 80DD of the Income Tax Act.

Vikas Gandhi Group Head – Direct Taxes at Taxsmile.com, the complete online tax filing portal. A practising Chartered Accountant for more than 10 years, he has been in the core team for developing ‘CA Office’, an ERP system for Chartered Accountants. He hosts a weekly chat on Rediff.com on tax-related matters every Thursday, 4pm IST.

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