Income tax deductions towards expenses for medical treatment of a disabled or ailing dependent
The Income Tax Act, 1961 provides special deductions in the income tax of a taxpayer who has a disabled or ailing dependent for whom the tax payer has to incur expenditure for the medical treatment or maintenance.
Similarly deduction is also allowed to a taxpayer who is himself suffering from a disability or ailment requiring regular expenses.
Provisions contained in Section 80U of the Income Tax Act:
Section 80U of the Income Tax Act states that a resident suffering from a permanent physical disability or mental retardation can avail a deduction up to Rs.50, 000/- in his taxable income. However, a higher deduction of Rs.1, 00,000/- has been provided if a person suffers from severe disability over 80%.
Definition of “permanent disability”:
A person with “disability” means a person who is suffering from any disability over 40% as certified by a medical authority.
“Disability” for the purposes Section 80U means and includes blindness, low vision, hearing impaired, autism, cerebral palsy, mental retardation, etc.
For claiming such deduction a taxpayer has to obtain a certificate issued by the medical authority provided in the Disability Act.
Provisions contained in Section 80DD of the Income Tax Act:
Section 80DD of the Act provides that if a resident or a HUF incurs any expenses for the medical treatment, training or rehabilitation of a dependent, or has paid any amount under any scheme framed by the LIC for the maintenance of such dependent, the individual or HUF, as the case may be, shall be allowed a deduction up to the maximum amount of Rs.50, 000.
A deduction of Rs.1, 00,000 has been provided for persons with severe disability. The meaning of the term ‘disability’ and ‘severe disability’ have been defined in the Disability Act, 1995 and have been explained with reference to Section 80U of the Income Tax Act.
For claiming deduction as per Section 80DD, the tax payer has to obtain a certificate from the Medical Authority under the Disability Act.
Provisions contained in Section 80DDB of the Income Tax Act:
Section 80DDB of the Act provides a deduction of up to Rs.40, 000/- for any amount paid for the medical treatment of a particular disease or ailment, as specified, for the tax payer or a relative who is dependent upon him if the taxpayer is an individual, or for any member of the HUF, if the taxpayer is a HUF.
It has also been provided that where such expenses have incurred for the treatment of a senior citizen, a deduction be up to Rs.60, 000/- is allowable.
However the deduction allowable under this section shall be the prescribed amount of or the expenses actually incurred, whichever is less.
Specified diseases as provided in the Income Tax Act:
The specified diseases have been listed under the Income Tax Rules. They include Cancer, AIDS, Thalassaemia, Renal failure, Neurological disorders, Blindness, Autism, etc.
Who is a relative or disabled dependent?
For individuals, his spouse, son, daughter or parents are considered as dependent relative.