IT deductions on disability of dependent

The expenses incurred on medical care and nursing of dependents with specified disabilities can be claimed as deduction under the Income Tax Act. Some of the disabilities covered under the Act include locomotor disabilities such as cerebral palsy, autism and disability in the movement of bones, joints and muscles, blindness or low vision, hearing loss, mental illness or mental retardation, etc.

The deduction is available for medical expenses incurred towards nursing, training and rehabilitation of the disabled dependent. The dependents include the parents, children, spouse, brothers and sisters who are wholly or mainly dependent on the taxpayer for support and maintenance. 

In the case of normal disability, the amount of deduction available is Rs 75,000 per year. However, in the case of severe disability, an amount of Rs 1,25,000 per year can be claimed as deduction by the taxpayer.

Apart from above expenses, if the taxpayer pays or deposits an amount with an insurer or an administrator for the maintenance of the disabled dependent, such amount paid is also eligible for deduction under the IT Act. However, the taxpayer needs to pay the amount in a scheme which provides for the payment of annuity or lump sum amount for the benefit of the disabled dependent after the death of the taxpayer.