IT reduction for disabled child

  • Under Sec 80DD of the Income Tax act you can claim a deduction if you have a handicapped dependent.
  • Depending on the extent of the disability of your dependent, deduction allowed is Rs. 50,000 / Rs. 75,000 (severe disability).
  • This is a lump-sum deduction, and doesn’t depend on the amount actually spent.

You can claim deduction u/s 80DD if:

  •  You spent on the medical treatment, training and rehabilitation of a disabled dependent (Amount spent for nursing is considered as expenditure on medical treatment) OR
  • You paid an amount for an insurance scheme  meant to take care of the maintenance of your disabled dependent in case of your untimely death.

Note: Only specific schemes meant for this purposewill qualify for second condition. The policy has to insure your life and the policy has to pay an annuity (a fixed amount every year) or a lump sum amount for the benefit of the disabled dependent.

What is considered as disability?

Disability would be as defined by the “Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995”.

It includes the following:

Low vision
Hearing impairment
Locomotor disability
Mental retardation
Mental illness

A person with disability means a person suffering from not less than 40% of any of the above disabilities.

Severe disability means 80% or more of one or more of the above disabilities.

Who is qualified to claim this deduction?

Any individual or a Hindu Undivided Family (HUF) can claim this deduction.

Please note that the individual or HUF has to be a resident of India – a non-resident Indian (NRI) can not claim deduction u/s 80DD.

 Who can be your disabled dependent?

For individuals, your spouse, son / daughter (any child), parents and brother / sister (siblings) can be your handicapped dependents.

For HUFs, any member of the HUF can be a disabled dependent.

The disabled person should be wholly or mainly dependent on you for his / her support and maintenance, and should not have claimed deduction under section 80U.