What tax benefits are available for parents of autistic children?
- Name withheld on request.
Since your son is diagnosed with autism, you are entitled to claim a fixed deduction of ₹ 75,000 per year under Section 80DD of the Income Tax Act. This deduction covers expenses related to medical treatment (including nursing), training, and rehabilitation of a dependent with a disability.
Importantly, in the case of autism, the 40% disability threshold does not apply to claim this deduction. You will, however, need a valid medical certificate issued by a neurologist or a civil surgeon/chief medical officer at a government hospital, which must be filed using Form 10IA before filing your income tax return.
If your son's condition is classified as a severe disability (more than 80%), the deduction increases to ₹ 125,000 per year.
As for your second query, yes, you are correct—the clubbing provisions under the Income Tax Act do not apply in the case of a minor child with a disability as defined under Section 80U. Since autism is included in this definition, any income your son earns will not be clubbed with your income. This provides a significant financial planning advantage.
Regarding estate planning, you can consider creating a special needs trust for your son's future. This can be done either:
During your lifetime (an inter vivos trust), or
Through your will (a testamentary trust, which takes effect after your passing).
The trust deed should clearly outline the purpose of the trust, the appointed trustee(s), and how the funds are to be managed and utilised for your son's care. As long as the trust is set up specifically for the benefit of a dependent with a disability, any property or funds received by the trust will be exempt from tax.
The most critical part of this process is identifying a trustworthy and capable trustee who can ensure your child's well-being and financial security over the long term.
Mahesh Nayak, chartered accountant, CNK & Associates.
If you have any personal finance query, write to us at mintmoney@livemint.com to get it answered by experts.
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