Income Tax Exemption for Physically Handicapped: A complete Guideline

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When we get older, it’s natural for us to take care of others. However, caring for someone who is physically disabled requires a significant time commitment. Because they necessitate 24 hour care. The pandemic has been the most significant health crisis, putting individuals and their families at risk.

A sudden accident or illness can be complex or challenging to overcome without a set financial plan. It offers a safety net for you and your loved ones. Therefore, it is incredibly vital that all financial instruments are put together to safeguard you and your family.

This article will give you a complete guideline on income tax exemption for physically handicapped. 

Eligibility Criteria

The following eligibility criteria are crucial when trying to claim income tax exemptions for physically handicapped, such as

The tax deduction is only allowed for HUF and resident individuals.

Since tax deductions are not allowed for NRIs and non-resident individuals, they are not able to claim this deduction.

Individuals who claim deductions under section 80C investments help benefit people who are handicapped or with disabilities.

Taxpayers filing ITR under the new income tax regime are outlined in the yearly budget.

Who Can Claim Tax Deduction Under Section 80C

An individual who has been certified as a person with a disability by a medical authority may claim the Section 80C tax benefit. A person with a disability is defined as having at least 40% disability, as certified by medical authorities, for the purposes of this section.

Disability has been defined as one of the following for the purposes of this section:

Blindness

Low vision

Leprosy-cured

Hearing impairment

Locomotor disability

Mental retardation

Mental illness

The section also defines a severe disability as a condition in which the disability is 80 percent or greater. Multiple disabilities, autism, and cerebral palsy are examples of severe disabilities.

Conditions to Claim Income Tax Exemption for the Physically Disabled

The following conditions are required by law in order to claim a tax deduction under Section 80DD:

The dependent, disabled individual is eligible for the deduction, not the taxpayer.

The dependent individual’s disability should be greater than 40%.

A spouse, parent, child, or sibling is considered a dependent, disabled family member for a resident individual.

In the case of a HUF, the dependent disabled person can be any member of the HUF.

If the taxpayer has already claimed a deduction under Section 80U for the dependent, disabled individual, the taxpayer cannot claim another deduction for the dependent individual.

Requirements to Claim Tax Exemption

Aside from the certificate certifying the disability from a recognized medical authority in Form 10-IA, no documentation is required.

To make a claim under this section, one must submit a medical certificate indicating the disability along with the income tax returns required under Section 139 for the applicable AY.

Certificates could be obtained from medical authorities such as a neurologist with a Doctor of Medicine (MD) in Neurology (or a pediatric neurologist with an equivalent degree) or a civil surgeon or Chief Medical Officer in a government hospital.

Conclusion 

Other schemes include tax-saving fixed deposits, employee provident funds, and so on. When it comes to physically disabled people, having an income tax deduction scheme can be extremely beneficial. Because there are no guarantees in life, it is critical to save and invest appropriately.

The income tax laws of India provide numerous benefits to the physically disabled; taking advantage of these benefits can be extremely beneficial to them.