FINANCIAL PLANNING FOR SPECIAL NEEDS FAMILIES- Part 4
Hello Friends!
Hope my blogs are proving helpful in motivating you to start with your financial planning. Continuing with the series, in today’s blog, I will give an overview about the tax benefits available to differently abled persons in India.
As we all know, tax planning is an integral part of any financial plan. In our country, tax is payable at different stages. Effective tax planning at all stages helps you earn maximum gains.
In the introductory blog of this series, I discussed how special needs families get caught in the web of various therapies, never ending expenses, social stigma, demotivating relatives & neighbors. This takes a toll on their physical and mental health. Amidst the everyday unknown challenges, the importance of financial planning takes a back seat to the extent that most of us do not even claim the income tax benefits especially available for differently abled persons.
Here, I confess that I being a finance professional was aware of these benefits. However, for a very long time, I could not accept my son’s diagnosis and deliberately didn’t claim any of these benefits, despite being eligible, because somewhere inside me, something was stopping me to claim it. It was something like as if not claiming these benefits seemed like a false hope that my son’s diagnosis was incorrect and everything is all right.
I strongly feel that most of the parents have similar feelings in their heart. However, over a period of years, I could finally accept and realized what a big mistake it was. Taxes play a very significant role in overall wealth accumulation and are helpful in managing the financial affairs smoothly.
In today’s blog, I will briefly discuss these Income tax benefits. The idea behind today’s blog is to give a broad overview about the income tax benefits available to special needs persons and their families. In the following blogs, I will be discussing each of these in details.
As already discussed, in the Income Tax Act, 1961 there are tax benefits available for differently abled persons in India. First let us see who all can avail these benefits.
The Income Tax Act 1961 provides various benefits to the following-
– Individuals who are differently abled
– Parents who have differently abled children
– Individuals taking care of spouse or parent or sibling, who is differently abled person
– Families (HUF) taking care of a disabled family member
DEDUCTION UNDER SECTION 80U OF INCOME TAX ACT, 1961
– Deduction available to disabled person
– Such person is resident of India
– Such person is certified by the prescribed medical authority to be a person with disability
– Benefit is in the form of deduction from taxable income
DEDUCTION UNDER SECTION 80DD OF INCOME TAX ACT, 1961
– Deduction available to an Individual/HUF who has a dependent with disability
– Deduction available to a person resident in India
– Deduction is in respect of maintenance including medical treatment of a dependent who is a person with disability
– Such disabled dependent should be certified by the prescribed medical authority to be a person with disability
– The resident individual/HUF claiming the deduction has
o Incurred any expenditure for medical treatment of a dependent person with disability
o Has paid or deposited any amount towards an approved scheme for the maintenance of a disabled dependent
– Benefit is in the form of deduction from taxable income
In my next two blogs, I will be discussing Sec 80U and Sec 80DD of Income Tax Act, 1961 in detail.
However, if you have any specific query relating to these sections, feel free to send them on shivanilohia.slohia@gmail.com.
Till then, if you want, you can read more about these deductions on the govt website
http://www.incometaxindia.gov.in
Hope today’s blog proves useful in understanding the available tax benefits .
Thanks & Regards!
Author Shivani Lohia
Shivani Lohia is a Chartered Accountant by profession and mother to 8 years old child on the autism spectrum. The cause of autism awareness is very close to her heart and she strongly believes in equal education for all & strongly advocates inclusion. She has been homeschooling her son since he was 5 years old.