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Income Tax Disability Benefits in India: Get Rebate on the Tax You Pay

Income Tax, Insurance, Financial Planning, pension, loan for persons with disabilities
Alokita
Alokita | May 19, 2017 (Last update: September 25, 2019)

Alokita is a Polio Survivor. She overcame her disability and went on to become a commerce graduate. Alokita writes about disability issues and her appetite for learning new things is far from satiated.

Keeping in view the infrastructural challenges faced by the persons with disabilities and the extra cost they need to bear for their daily lives, the Income Tax Department of India has granted some special tax benefits to persons with disabilities. There are many disabled people who are eligible for such rebates but they do not know about these reliefs provided to them by the tax authorities. Moreover, the language of laws is quite cumbersome for a layman to understand. Today we will give you the simplest explanations of the three important sections of the Income Tax Act, 1961 that deal with deductions for persons with disabilities or a person who has a dependent with disability.

What is a tax deduction?

In simple terms, tax deduction is the discount given by the tax authorities on a person’s income tax.

It is necessary to understand that deduction is different from exemption and a grant. When we talk about deduction many people confuse it with these two terms.

Grant is something that government gives without taking something in lieu of it. When we say persons with disabilities are eligible for tax deduction we do not mean government will give them some money; it simply means the person will get a discount in their tax liability.

When an amount is exempted, it is simply not taken into account while calculating a person’s income.

In case of deduction the total tax amount is calculated and the amount allowed as deduction is subtracted.

Income Tax, Insurance, Financial Planning for persons with disabilities

Who is considered a person with disability?

First of all we need to understand who could be considered as a disabled person. The law states that anyone suffering with 40% or more of disability is a disabled person. For the sake of segregation in amount of tax benefits, the law divides persons with disabilities in two categories:

  • If a person has 40% to 80% disability she will be deemed as a Person with Disability (PwD)
  • If the disability is 80% or above; the person will be deemed as a Person with Severe Disability (PwSD)

What is disability according to law?

The Rights of Persons with Disabilities Act, 2016 recognizes 21 types of conditions as disabilities. These conditions are:

  1. Blindness
  2. Low-vision
  3. Leprosy Cured persons
  4. Hearing Impairment (deaf and hard of hearing)
  5. Locomotor Disability
  6. Dwarfism
  7. Intellectual Disability
  8. Mental Illness
  9. Autism Spectrum Disorder
  10. Cerebral Palsy
  11. Muscular Dystrophy
  12. Chronic Neurological conditions
  13. Specific Learning Disabilities
  14. Multiple Sclerosis
  15. Speech and Language disability
  16. Thalassemia
  17. Hemophilia
  18. Sickle Cell disease
  19. Multiple Disabilities including deaf-blindness
  20. Acid Attack victim
  21. Parkinson’s disease

How much tax deduction is allowed as benefit for disabled persons?

Deduction allowed for disability is of fixed nature i.e. it is a fixed amount regardless of the income of the person.

Tax benefit for a person with disability

A person with disability (i.e. someone who has 40% to 80% disability) can deduct Rs. 75,000 from her overall income. The person does not need to pay income tax on this amount.

Tax benefit for a person with severe disability

A person with severe disability (i.e. someone who has 80% or above disability) can deduct Rs. 1,25,000 from her overall income. The person does not need to pay income tax on this amount.

Under which sections tax benefits for disabled persons are provided?

The disability deduction is allowed under section 80DD and 80U

  • Section 80DD – An assessee who has a person with disability in her family who is a minor or mainly dependent on her for survival can claim tax deduction u/s 80DD.
  • Section 80U – An assessee who herself is disabled is eligible to claim deduction u/s 80U. She does not need to have any proof of expenses to avail this benefit.

Note 1: If you want rebate under section 80DD, the assessee may need to furnish proof of medical, nursing or rehabilitation expenses incurred on the disabled dependent along with the  disability certificate.

Note 2: It is mandatory to note that if a person with disability is seeking deduction u/s 80U his parents/guardian cannot claim deduction u/s 80DD and vice versa.

Note 3: Same deduction amount is allowed under both the sections.

What are the documents required to avail disability tax benefits?

Thankfully, there’s no lengthy procedure involved in availing the benefit of tax deduction. You just need to file your income tax return and have a copy of your certificate of disability.

In case of autism, Cerebral Palsy and multiple disabilities, form 10-IA may need to be filled. However, we don’t see anymore use of this form because these three conditions are now part of the list of recognized disabilities.

So, essentially, you simply need your certificate of disability obtained from the medical authority of central or state government.

How to get disability certificate?

A disability certificate may be issued by:

Note 4: Now the government has begun to issue the Unique Disability ID in place of disability certificates.

Note 5: If the disability is of permanent nature then a permanent certificate will be issued. But if the disability requires reassessment then there will be an expiry date of the certificate. In such case deduction will be allowed only if the certificate hasn’t expired. You need to renew your certificate for availing further benefits.

We hope this article was useful for you. Should you have any questions, please feel free to ask in the comments section below. We will try to answer your query.

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15 responses to “Income Tax Disability Benefits in India: Get Rebate on the Tax You Pay”

  1. Avatar mukesh kumar says:

    Very well written and explained. but section 80u of It does not refer to RPWD Act 2016 which covers 21 disease. The current section of 80u refers to the PwD Act 1995 which covers only 7-8 types of disease. My doctor is also asking for a written act where multiple sclerosis is covered.

    • Lalit Kumar Lalit Kumar says:

      Thank you, Mukesh. The RPWD Act 2016 has been passed by the Parliament. You if you’re covered under the RPWD Act 2016 — just file your income tax return and claim exemptions under 80u. If Income Tax department asks you, you can always show them the copy of the Act from the Ministry’s website.

  2. Avatar Lakshmi says:

    I have 2 dependents with disability – one with Multiple Sclerosis and another an autistic child. Will I be able to get double tax benefit or will it be an overall Rs.75000/- tax free income?

  3. Avatar HRUDANANDA JENA says:

    I am a handicapped person with 50 % disability(Locomotors disability),working in BSNL as Sub Divisional Engineer(SDE)-Group-B cadre.Can I get promoted to AGM-Group-A cadre as AGM posts are filled 100% through promotion from feeder cadre SDE.Department follows only DOPT order but there is no order of DOPT for promotion to handdicapped persons despite Suprme court judgement dated 30.06.2018 in Rajiv Gupta case(Prashar Bharati-A Govt of India undertaking). Please guide me how to fight the case.
    Regards,
    Hrudananda Jena

    • Avatar gaurav singh says:

      Dear HRUDANANDA as judgement has come out as on 25/01/2020 for clear instruction to no discrimination in reservation in promotion, but it has to implement by DoPT and the way is not so easy yet,so all we fight for implement through the CAT.

  4. Avatar Suresh Kulkarni says:

    I have son who is 10 year old Autistic, I would like to keep FD in his name for his future and is there any benefit he will get as far as TDS is concerned. Also can he have a bank account and Fixed deposits in his name ?. Please reply to kulsuresh@gmail.com

  5. Avatar Sushil Kumar says:

    my handicap certificate was issued on 22.09.2006 with 80% permanent disability at the age of 22 years. i want to know, is it necessary to renew the handicap certificate. i am from haryana. please reply for my comment.

  6. Avatar Murali says:

    Is there any concession for medical expenses incurred for treatment for a disabled person

  7. Avatar Capt Grewal says:

    My daughter has been recently diagnosed with multiple sclerosis. She is working but the treatment / management of this condition is very expensive.
    Is she entitled to Income Tax Deduction towards her treatment and also are there any Government Grants / Assistance available for treatment of this condition in India.

  8. Avatar govindashetty k,b says:

    Hai i am govindashetty k.b i need more information deduction of tax like A disability person starts near Bangalore new trust either above tax deduction rules more guidance
    2.more article of constitution mentioned in that guidence needed

  9. Avatar govindashetty k,b says:

    now making across in india uid card its the present certificate of disability apply first

  10. Avatar prabhavathi g s says:

    There is a loss of 45.13% in right year (63.75 db) and 58.75db(26%) and total 29.18% in both ears. Whether I am eligible for IT deduction under disability?

  11. Avatar Devang rana says:

    I have vision in one eye and disability certificate of 30 percent. What benefits can I receive?

  12. Avatar Rajesh Chandra Choubey says:

    Sir/Madam,
    I’ve Parkinson’s disease and have applied for disability certificate. The Medical Board is scheduled to examine my percentage of disability today.

    I’m a permanent government employee of Government of Bihar and every year I pay TDS from my salary of February. But this time, I’ve requested my DDO to delay my salary as I’m expecting my certificate of disability be issued soon.

    Is this advisable that I claim tax benefits in anticipation of myself getting certificate of disability ?

    Kindly suggest.

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