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Union Budget 2022 has proposed a tax relief for parent or guardian of a differently abled person, according to the official documents.
The parent or guardian of a differently abled person can take an insurance scheme for such person. The present law provides for deduction to the parent or guardian only if the lump sum payment or annuity is available to the differently abled person on the death of the subscriber i.e. parent or guardian.
Further, there could be situations where differently abled dependents may need payment of annuity or lump sum amount even during the lifetime of their parents.
In this scenario, Sitharman proposed to allow the payment of annuity and lump sum amount to the differently abled dependent during the lifetime of parents or guardians on attaining the age of sixty years.
According to the Budget memorandum, the existing provision of Section 80D provides for a deduction to an individual in respect of expenditure for the medical treatment (including nursing), training and rehabilitation of a dependent, being a person with disability.
The above section allows deduction only if the payment of annuity or lump sum amount is made to the benefit of the dependent, in the event of the death of the individual whose name subscription to the scheme has been made.
However, there could be cases where handicapped dependents may need payment of annuity or lump sum basis even during lifetime of their parents.
Therefore, in order to remove this genuine hardship, it is proposed to allow the deduction under the said section also during the lifetime, i.e., upon attaining age of sixty years or more of the individual or the member of the HUF in whose name subscription to the scheme has been made and where payment or deposit has been discontinued, the Budget memorandum noted.
"Further, it is proposed that the provisions of sub-section (3) shall not apply to the amount received by the dependent, before his death, by way of annuity or lump sum by application of the condition referred to in the proposed amendment. This amendment will take effect from 1st April, 2023 and will accordingly apply in relation to the assessment year 2023-24 and subsequent assessment years."
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