Know About The Health Insurance Tax Benefits For Specially-abled Individuals

Health insurance is one of the most crucial things that an individual should have because of the benefits it offers. In times of a medical emergency, health insurance guarantees the individual financial backing. According to statista.com, for the fiscal year of 2021, nearly 514 million people across India were covered under types of health insurance schemes. 

In this article today we will discuss specially abled individuals and the tax benefits* that they can claim on health insurance

Tax Benefits for Specially Disabled

Many people may assume that anyone with any percent of disability is eligible for the special tax benefits. However, it is the percentage of disability suffered by a person that decides the kind of benefits an individual can make. The percentage of disability is carefully measured to avail these tax benefits. For example, if a person suffers more than 40% but less than 80% disability, they can claim a deduction of Rs. 75,000 in one financial year. If the disability is above 80%, then a benefit of Rs 1.25 lakh can be claimed by the person. This limit is regardless of the actual expenses induced. 

Another thing also to note here is that an individual can claim a tax deduction under section 80DD if they have spent money on the training, medical treatment, or rehabilitation of a disabled dependent of a differently-abled person.

To help you understand how the tax benefits for disabled individuals work, you will have to understand how a disability is defined by the constitution. *

What is a disability and how is it defined?

According to The Rights of Persons with Disabilities Act, 2016, the following 2 categories define disability –

“Person with a disability” means a person with long-term mental, physical, intellectual, or sensory impairment which, in interaction with barriers, hinders his full and effective participation in society equally with others.

“Person with benchmark disability” means a person with not less than 40%. of a specified disability where specified disability has not been defined in measurable terms and includes a person with disability where specified disability has been defined in measurable terms, as certified by the certifying authority.

Currently, there are 21 types of disabilities that fall under this act and the Central Government has the power to add disabilities in the future under this act. 

Here are all the 21 disabilities for your reference –

1. Blindness

2. Low-vision

3. Leprosy Cured individuals

4. Hearing Impairment

5. Locomotor Disability

6. Dwarfism

7. Intellectual Disability

8. Mental Illness

9. Autism Spectrum Disorder

10. Cerebral Palsy

11. Muscular Dystrophy

12. Chronic Neurological conditions

13. Specific Learning Disabilities

14. Multiple Sclerosis

15. Speech and Language disability

16. Thalassemia

17. Haemophilia

18. Sickle cell disease

19. Multiple Disabilities including deaf-blindness

20. Acid Attack victims

21. Parkinson’s Disease

* Standard T&C Apply

Now let’s move on to the important part of how you can avail these tax benefits and what are the documents required for the same.

How to avail the tax benefit?

One can claim health insurance tax benefits under section 80DD on the premiums paid against a health insurance policy. Under section 80DD, health insurance covers dependents such as the spouse, parents, in-laws, children, and siblings of the taxpayer. The disabled person should be completely or majorly dependent on the taxpayer.

To claim tax under section 80DD deduction, a person needs to submit the following set of documents:

●      Self-Declaration Certificate: The individual needs to declare the cost of the medical treatment (this will also include training, nursing, and rehabilitation) for the differently-abled person dependent on the taxpayer.

●      Receipts of Paid Insurance Premium: Submission of the original receipts of premium paid towards disability insurance. 

●      Form 10-IA: If the person has autism, cerebral palsy, or multiple disabilities, then this document has to be submitted

●      Medical Certificate: A copy of the medical certificate is compulsory. The certificate will describe the nature and extent of the disability suffered by the individual.

Under section 80U, a differently-abled person can themselves get a tax benefit for any related medical expenses. In today’s times, it has also become easier to research health insurance schemes, use a health insurance premium calculator, and buy a policy online. *

*Tax benefits are subject to change in tax laws.

Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.