SECTION 80 U of the Income Tax Act 1961: Allows an exemption of Rupees Forty Thousand from the income of the assessee with disability.

Requirement for availing the discount: Disability Certificate issued by a physician, an Oculist, or a Psychiatrist as the case may be, working in a Government Hospital.

SECTION 80 DD of the Income Tax Act 1961: Parent or relative upon whom the person with disability is dependent is allowed deductions of Rupees Forty Thousand for maintenance, which includes medical treatment of person with disability. The specifics of the deduction allowed are contained in the extracts reproduced below. Visitors are urged to take these as pointers, to help them know where to look for the appropriate rule. The published income tax rules, with their periodic amendments.

And remember: you can always give your suggestions for changes in the income tax act. If you don't try, it won't happen!

INCOME TAX ACT EXTRACTS

Section 80DD

Deduction in respect of maintenance including medical

1. Where an assessee, who is a resident in India, being an individual or Hindu undivided family has, during the previous year:
   
1. Incurred any expenditure for the medical treatment (including nursing), training and rehabilitation of a handicapped dependant; or
   
2. Paid or deposited any amount under a scheme framed in this behalf by the Life Insurance Corporation or Unit Trust of India subject to the conditions specified in sub-section (2) and approved by the Board in this behalf for the maintenance of handicapped dependant. The assessee shall in accordance with and subject to the provisions of this section, be allowed a deduction of a sum of forty thousand rupees in respect of the previous year.
   
   
2. The deductions under clause (b) of sub-section (1) shall be allowed only if the following conditions are fulfilled, namely:
1. The scheme referred to in clause (b) of sub-section (1) provides for payment of annuity or lump sum amount for the benefit of a handicapped dependant in the event of the death of the individual or the member of the Hindu undivided family in whose name subscription to the scheme has been made;
2. The assessee nominates either the handicapped dependant or any other person or trust to receive payment on his behalf, for the benefit of the handicapped dependant.
   
   
3. If the handicapped dependant predeceases the individual or the member of the Hindu undivided family referred to in sub-section (2) an amount equal to the amount paid to be deposited under clause (b) of sub-section (1) shall be deemed to be the income of the assessee of the previous year in which such amount is received by the assessee and shall accordingly be chargeable to tax as the income of the previous year.
   
   
4. In this section,
1. "Government hospital" includes a departmental dispensary whether full-time or part-time established and run by a Department of the Government for the medical attendance and treatment of a class or classes of Government servants and members of their families, a hospital maintained by a local authority and any other hospital with which arrangements have been made by the Government for the treatment of Government servants;
2. "handicapped dependant" means a person who -
1. is a relative of the individual or, as the case may be, is a member of the Hindu undivided family and is not dependant on any person other than such individual or Hindu undivided family for his support or maintenance; and
2. is suffering from a physical disability (including blindness) or is subject to mental retardation, being a permanent physical disability or mental retardation specified in the rules 8 made by the Board for the purposes of this section, which is certified by a physician, a surgeon, an oculist or a psychiatrist, as the case may be, working in a Government hospital, and which has the effect of reducing considerably such person's capacity for normal work or engaging in a gainful employment or occupation;
3. "Life Insurance Corporation" shall have the same meaning as in clause iii) of sub-section 8) of section 88;
4. (Unit Trust of India" means the Unit Trust of India established under the Unit Trust of India Act, 1963 (52 of 1963).

Permanent physical disability: Physical disability shall be regarded as a permanent physical disability if it falls in any of the categories specified below, namely:

1. permanent physical disability of more than 50 percent in one limb; or
permanent physical disability of more than 60 percent in two or more limbs; or permanent deafness with hearing impairment of 71 decibels and above; or
2. permanent and total loss of voice.

Deductions are allowed to persons making donations to registered trusts and societies doing work for the handicapped. The relevant sections are 80G and 80GGA.

Under Section 80G deduction from income is allowed at 50 percent of the amount donated to the eligible institution. The amount on which deduction is claimed under the section, however, cannot exceed 10 percent of the gross total income.
exemptions. This is only in respect of certain specific projects for research, development etc. (Section 80GGA).

Deductions in respect of donations may be claimed by all assessees, i.e. individuals, Companies etc.