As it is the rising inflation and higher costs of medical treatments have made life difficult for an average person. What to talk of woes of those who have handicapped person to support where he is concurrently spending on the treatment.
Thus to mitigate these financial hardships faced by the handicapped persons and their parents, Income Tax Act offers many benefits in the form of deduction from total income with reference to the handicapped person. Not only this, there are some insurance products which have been devised by insurance companies for the benefit of parents/ guardians of handicapped dependents.
Unfortunately many of us are not aware of these benefits.
So what are these benefits?
You can claim tax benefit under Section 80 DD which allows the deduction for money spent on maintenance of your handicapped dependent or for providing for your dependent through payment of insurance premium. You are allowed a deduction of Rs.50,000 in respect of any expenditure incurred for medical treatment, training or rehabilitation of your dependent with disability. In case of severe disability you are entitled to an enhanced deduction of Rs. 100,000.
In addition to deduction in respect of expenses incurred on the treatment of such a person, , Section 80DD also allows deduction in respect of any money paid to Life insurance Corporation (LIC) or any other insurer for the purpose of buying specified scheme or insurance for the purpose of maintenance of such dependent. The aggregate deduction under Section 80DD in respect of treatment, maintenance as well for payment of money under the scheme approved can not exceed Rs. 50,000 in case of disability and Rs, 100000 in case of severe disability.
For claiming the deduction in respect of the above, you have to furnish a medical certificate from a Government Hospital certifying the disability of the dependent and a self declaration certifying the expenditure incurred on account of medical treatment (including nursing), training and rehabilitation of the handicapped dependant. You do not have to preserve the actual receipts for expenses incurred. However you will have to produce the actual receipts in case you claim payment to LIC, UTI etc for the purpose of buying insurance or other schemes for maintenance of such dependent.
Not only this, Income Tax also extends benefits to the handicapped person himself. The Section 80U of the income tax act allows a deduction of Rs. 50,000 from his income, provided the disability of the person has been certified by the medical authority. This deduction of Rs. 50,000 gets enhanced to Rs. 100,000 if the person suffers from severe disability. In order to claim this deduction, the person needs to obtain a certificate from one of the specified medical authorities and keep it up to date in case this needs to be renewed periodically.
insurance companies have also come up with specialized schemes for those who have handicapped dependents. But not many of us are aware of them.
The health insurance cover provided by National Trust needs special mention. The trust has introduced Niramaya health insurance Scheme for persons with disabilities like Autism, Cerebral Palsy and Mental Retardation etc. Under this scheme, for those who have family income of less than Rs. 15,000 per month, you need to make a payment of Rs. 250 per year. For the person having family income of more than Rs. 15,000 per month is required to pay an amount of Rs.500 per year. For the families which are Below Poverty Line (BPL) this scheme is free, provided the applicant holds the BPL card. This scheme covers health expenses up to a limit of Rs. 100,000 per year for the person suffering from these disabilities. The scheme is administered by National Trust in collaboration with ICICI Lombard. Under this scheme even existing disease are covered without any medical check up. Moreover this plan covers routine expenses like medical check up, transportation and corrective surgery etc. which are not covered under regular health insurance products.
Besides, , Life insurance corporation of India also offers two insurance policies Jeevan Aadhar and Jeevan Vishwas for the benefits of parents or guardian of person with physical disabilities which qualify for tax benefit under Section 80DD.
. These policies ensure that the dependent person with physical handicap does not have to depend on anybody for financial support in case something happens to his parent or guardian. The Jeevan Aadhar is a non- profit policy and is relatively cheaper whereas the Jeevan Vishwas is a policy which participates in profits.
Under both these polices insurance the life of the person, on whom the handicapped person is dependent, is insured. In case the dependent dies before the guardian/parent the policy the parent/guardian will have the option to either keep the policy for a reduced paid-up sum assured or entitled to receive the refund of premiums paid.
However if the parent/guardian dies before the dependent, 20% of the lump sum assured becomes payable for the benefit of the dependent. Moreover the balance is paid by way of monthly annuity for 15 years for sure and thereafter for life on the life of dependent.
In addition to income tax benefits available to the parents or guardian for maintenance and medical treatment of handicapped dependent, there are many affordable medical and insurance products specially devised for such handicapped person, which are a great help.
The physical and mental agony experienced by the parents/ guardian of such dependents cannot be taken away but Government of India, National Trust, LIC and other charitable institutions are doing commendable job to reduce the financial agony of such a family.
It is important that all of us look for such benefits available and talk these about in various media to take it across as many people as possible.
This is our bit of social work which can give relief to handicapped persons and their parents.