Having a specially-abled individual who is dependent on you can be emotionally and financially taxing. However, the government provides some respite through tax deductions on their medical expenditures. This article will explore the tax benefits you can avail of under Sections 80DD and 80U of the Income Tax Act if you have a disabled dependent.
Table of Contents
Introduction
Over 21 million Indians are estimated to live with one or more disabilities. Caring for their wide-ranging medical needs can burn a deep hole in one’s pockets. However, the government provides substantial tax deductions on the medical expenditures incurred on disabled dependents. Read on to determine your eligibility and the documents needed to claim these tax benefits under Sections 80DD and 80U.
How is Disability Defined?
The PWD Act 1995 states that a person must have at least 40% impairment to avail of disability benefits. The impairments covered include:
- Blindness
- Low vision
- Leprosy
- Hearing impairment
- Locomotor disability
- Mental illness
- Cerebral palsy
- Mental retardation
- Autism
Those suffering from multiple disabilities are considered severely disabled, as are those with over 80% impairment.
What Are the Limits of Tax Benefits?
If your dependent has above 40% but under 80% impairment, you can claim deductions of up to ₹75,000 per year on medical expenditures under Section 80DD.
For those with over 80% impairment, deductions of up to ₹1.25 lakh per year can be claimed under the same section.
These limits apply irrespective of actual expenses.
Relevant Tax Sections
Sections 80DD and 80U of the Income Tax Act define the tax deductions applicable for disabled individuals and their caregivers.
Section 80DD allows taxpayers to claim deductions on medical expenditures incurred for disabled dependents. This covers treatments, nursing, rehabilitation, disability insurance premiums, etc.
Section 80U allows disabled individuals to claim deductions on expenses incurred on their own treatments, care, insurance, etc.
Documents Required
Here are the documents needed to claim benefits under Section 80DD:
- Disability certificate outlining nature and extent of disability
- Form 10-IA for cerebral palsy, autism, multiple disabilities
- Self-declaration of expenses
- Original disability insurance premium receipts
How Can Filingwala Help You Claim Benefits?
The process of claiming disability tax benefits can be challenging for caregivers and disabled individuals alike. This is where Filingwala can help!
Filingwala is an accounting services company that specializes in end-to-end tax filing, from returns to deductions and exemptions. Their experts can review your documents, determine eligibility for claims under Sections 80DD and 80U, and file accurate returns that maximize your deductions.
Additionally, Filingwala assists with:
- Company registration
- Trademark filing
- GST registration and filing
- Income tax return filing
- Other tax registrations and compliances
So whether you need assistance with yearly ITR filing or have questions on disability tax benefits, Filingwala has got you covered! Connect with their tax professionals today for end-to-end tax filing services.
Frequently Asked Questions
Q1. Can I claim tax deductions for my child’s autism treatments under Section 80DD?
Yes, you can claim deductions of up to ₹75,000 or ₹1.25 lakh per year on medical expenditures incurred for your child’s autism treatments, depending on the severity of impairment.
Q2. Are disability insurance premiums eligible for tax deductions under Section 80DD?
Yes, any premiums paid towards disability insurance policies of your dependent fall under deductible medical expenditures as per Section 80DD.
Q3. Can I claim deductions as a disabled individual under Section 80U?
Yes, Section 80U allows flat deduction of 75000 or 125000 as the case may be irrespective of amount spent on treatment.
Q4. What kind of expenses qualify for claims under Section 80DD?
Medical treatments, nursing charges, rehabilitation, specialized training, disability insurance premiums, etc. qualify for claims under Section 80DD for disabled dependents.
Conclusion
Caring for disabled dependents can have significant financial implications. However, Sections 80DD and 80U of the IT Act provide much-needed tax deductions on disable care expenses. Determine your eligibility, gather relevant documents, and connect with experts like Filingwala to maximize your deduction potential. This can provide substantial savings to ease the monetary burden of disabilities.
