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Transport Allowance: Tax Exemption, Limits for Tax Year 2026-27 and Rules

Posted on by CA Meet Dhrangadhariya

Last updated: 29 July 2026 · Written and reviewed by CA Meet Dhrangadhariya, CSM & Co LLP

Quick summary

  • A transport allowance for travel between home and office is fully taxable for most employees. The old ₹1,600 a month exemption ended with the standard deduction in FY 2018-19.
  • Employees who are blind, deaf and dumb, or orthopaedically disabled get an exemption: ₹3,200 a month up to FY 2025-26, and from 01/04/2026 ₹15,000 a month plus dearness allowance in metro cities or ₹8,000 plus dearness allowance elsewhere.
  • Employees of a transport business can exempt 70% of the allowance, up to ₹10,000 a month until FY 2025-26 and ₹25,000 a month from 01/04/2026, in the old regime.
  • The disability transport exemption works in both tax regimes.

A transport allowance is an amount an employer pays so an employee can travel between home and the place of work. For most employees it is fully taxable. A special exemption applies to employees with certain disabilities, and a separate one to employees of a transport business.

Up to FY 2025-26 the exemption was under section 10(14) of the Income-tax Act, 1961 and Rule 2BB. From Tax Year 2026-27 it is in Schedule III of the Income-tax Act, 2025, with the amounts in Rule 280 of the Income-tax Rules, 2026.

Why is it taxable for most employees?

Until FY 2017-18 every employee could exempt ₹1,600 a month of transport allowance. From FY 2018-19 that exemption was withdrawn and replaced by the standard deduction on salary, which now stands at ₹50,000 in the old regime and ₹75,000 in the new regime. So an ordinary employee pays tax on the whole allowance and gets the standard deduction instead.

Exemption for employees with disability

The exemption is for an employee who is blind, or deaf and dumb, or orthopaedically handicapped with disability of the lower extremities (from 01/04/2026, the lower or upper extremities), for travel between home and the place of duty.

Period Exempt amount per month
Up to FY 2025-26 ₹3,200
From 01/04/2026, metro cities ₹15,000 plus dearness allowance on it
From 01/04/2026, other cities ₹8,000 plus dearness allowance on it

This is available in both the old regime and the new regime. The part above the limit is taxable.

Transport business employees

An employee of a transport system who gets an allowance to meet personal expenses while on duty during the journey, and who does not get a daily allowance, can exempt 70% of the allowance, up to ₹10,000 a month until FY 2025-26 and up to ₹25,000 a month from 01/04/2026. This is allowed in the old regime only.

Transport allowance and conveyance allowance

Basis Transport allowance Conveyance allowance
For Travel between home and office Travel in the performance of duties, with no free conveyance from the employer
Exemption Only for disability or transport business, as above Actual expense incurred
Regimes Disability: both. Transport business: old only Both

Example

Mr D is an orthopaedically handicapped employee in Mumbai and gets ₹20,000 a month as transport allowance in FY 2026-27, with no dearness allowance on it. The exemption is the lower of ₹20,000 and ₹15,000 (plus DA on it, nil here), so ₹15,000 a month, ₹1,80,000 a year, is exempt. The balance of ₹5,000 a month is taxable.

Another employee with no disability and the same allowance pays tax on the whole ₹2,40,000 a year.

How to claim

Your employer applies the exemption when calculating TDS and shows it in Form 16. Give the employer a disability certificate. If it was missed, you can still claim the exemption when you file your return, in the exempt allowances part of the salary schedule.

Central Government employees

Transport allowance for Central Government employees under the 7th Pay Commission depends on pay level and city class (for example ₹7,200 plus dearness allowance for pay level 9 and above in the highest cities). It is taxable unless the employee has a disability and qualifies for the exemption above.

Frequently asked questions

Is transport allowance taxable?

Yes, for most employees it is fully taxable. The exemption for commuting allowance was withdrawn from FY 2018-19 when the standard deduction was introduced.

Who gets a transport allowance exemption?

An employee who is blind, deaf and dumb, or orthopaedically handicapped with disability of the lower or upper extremities, for travel between home and work.

How much is exempt for a disabled employee from 01/04/2026?

₹15,000 a month plus dearness allowance in metro cities, and ₹8,000 a month plus dearness allowance in other cities (up to FY 2025-26 the limit was ₹3,200 a month).

Is it available in the new tax regime?

Yes, the transport allowance for disabled employees is allowed in both regimes. The transport business exemption is old regime only.

Is transport allowance the same as conveyance allowance?

No. Transport allowance is for travel from home to office. Conveyance allowance is for travel in the performance of duties and is exempt to the extent of the actual expense.

Official sources

Related reading

Disclaimer

This article is for general informational purposes only and should not be considered professional advice. Please consult a qualified expert for advice tailored to your specific situation. The author and website owner are not liable for any errors or actions based on this content.

Appointment of Auditor under Section 139 of the Companies Act, 2013: Term, Rotation, First Auditor, Casual Vacancy and Removal

Posted on by CA Meet Dhrangadhariya

Last updated: 09 October 2026 · Written and reviewed by CA Meet Dhrangadhariya, CSM & Co LLP

Quick summary

  • A company appoints an auditor at its first AGM, to hold office till the sixth AGM, and then for each further block of five years (until the conclusion of every sixth AGM).
  • The first auditor is appointed by the Board within 30 days of registration, or by members at an EGM within 90 days if the Board fails. For a Government company, the CAG appoints within 60 days.
  • Listed companies and prescribed classes must rotate: an individual for one term of five years, a firm for two terms, then a five year cooling off.
  • Removal before the term ends needs a special resolution and the previous approval of the Central Government. A resigning auditor files a statement within 30 days.

Every company must have a statutory auditor. Section 139 of the Companies Act, 2013 says how the auditor is appointed, how long the appointment lasts, who steps in when the post falls vacant, and when a change is compulsory. Sections 140 and 141 deal with removal, resignation, and who may be an auditor.

Who can be an auditor (section 141)

  • A chartered accountant, or a firm in which the majority of partners practising in India are chartered accountants (an LLP counts as a firm). Only the partners who are chartered accountants may sign.
  • Not eligible: a body corporate other than an LLP; an officer or employee of the company; a person whose relative is a director or key managerial personnel; a person (or relative or partner) holding securities of the company above the permitted limit, or indebted to it above the prescribed amount; a person with a prescribed business relationship; a person holding more than 20 company audits; a person convicted of fraud in the last ten years; and a person who provides the prohibited non-audit services under section 144.
  • If an auditor becomes disqualified after appointment, the office is vacated and treated as a casual vacancy.

First auditor

Type of company Who appoints By when Holds office till
Company other than a Government company Board of Directors Within 30 days of registration Conclusion of the first AGM
Same, if the Board fails Members at an extraordinary general meeting Within 90 days (the Board informs the members) Conclusion of the first AGM
Government company Comptroller and Auditor-General of India Within 60 days of registration; if CAG does not, the Board within next 30 days; if the Board fails, members within 60 days at an EGM Conclusion of the first AGM

At the first AGM and after

At the first annual general meeting, the company appoints an individual or a firm as auditor to hold office from the conclusion of that meeting till the conclusion of its sixth annual general meeting, and thereafter till the conclusion of every sixth meeting. Before the appointment, the company must obtain the auditor’s written consent and a certificate that the appointment is within the prescribed conditions, including that the auditor meets section 141. The company must inform the auditor of the appointment and file a notice with the Registrar within 15 days of the meeting (this is done in Form ADT-1).

“Appointment” includes re-appointment. A retiring auditor can be re-appointed if not disqualified, has not given written notice of unwillingness, and no special resolution has been passed to appoint someone else or to say that he shall not be re-appointed. If no auditor is appointed at an AGM, the existing auditor continues.

If the company must have an Audit Committee, appointments and the filling of a casual vacancy are made after taking its recommendations into account.

Rotation (section 139(2))

No listed company, and no company in a class prescribed by rules, may appoint or re-appoint:

  • an individual auditor for more than one term of five consecutive years, or
  • an audit firm for more than two terms of five consecutive years.

After completing its term, the individual (or the firm) is not eligible for re-appointment in the same company for five years. A firm that has a common partner with an outgoing firm, whose tenure has just expired, cannot be appointed for five years. Members may also resolve that the auditing partner and team be rotated, or that the audit be done by more than one auditor (section 139(3)). The companies in the prescribed classes are set out in the Companies (Audit and Auditors) Rules, 2014: please check the paid-up capital and borrowing thresholds in the current rules before concluding that your company is outside rotation.

Government companies

The Comptroller and Auditor-General appoints the auditor within 180 days of the start of each financial year, and the auditor holds office till the AGM.

Casual vacancy (section 139(8))

  • Company not audited by a CAG-appointed auditor: the Board fills the vacancy within 30 days. If the vacancy arose from the auditor’s resignation, the company must approve the appointment at a general meeting convened within three months of the Board’s recommendation. The new auditor holds office till the next AGM.
  • Company audited by a CAG-appointed auditor: the CAG fills the vacancy within 30 days; if it does not, the Board fills it within the next 30 days.

Special notice and removal (section 140)

  • Special notice is required for a resolution at an AGM appointing a person other than the retiring auditor, or saying that the retiring auditor shall not be re-appointed. It is not needed where the retiring auditor has completed the maximum term of five or ten years under section 139(2). The company sends a copy of the notice to the retiring auditor, and if the auditor makes a reasonable written representation, the company states this in the notice to members and sends the representation to members. If it is received too late, the auditor can ask that it be read out at the meeting. The Tribunal can stop this if the right is being abused.
  • Removal before the term ends: only by a special resolution of the company, after getting the previous approval of the Central Government in the prescribed manner, and after the auditor has been given a reasonable chance to be heard.
  • Resignation: the auditor files a statement in the prescribed form with the company and the Registrar within 30 days of the resignation, giving reasons. For a failure to do so the auditor is liable to a penalty of Rs 50,000 or the amount of the remuneration, whichever is less, and Rs 500 for each day of continuing failure, up to Rs 2 lakh.
  • Fraud: the Tribunal can direct a company to change its auditor if the auditor has acted fraudulently or colluded in fraud. An auditor against whom a final order is passed is not eligible for appointment in any company for five years.

Remuneration (section 142)

Fixed by the members in general meeting or in the manner they decide. The Board can fix the first auditor’s remuneration. Expenses incurred for the audit are included, but not remuneration for other services requested by the company.

Points to check

  • Auditor rotation applies only to listed companies and the prescribed classes, so a small private company can keep the same auditor for any number of terms.
  • Forms (ADT-1 and the resignation forms), thresholds and fees come from the Rules and can change; use the current Companies (Audit and Auditors) Rules, 2014 and the MCA portal.
  • The text above follows the Companies Act as published on India Code, including its amendments up to the footnotes in that edition.

Frequently asked questions

When is the first auditor appointed?

By the Board of Directors within 30 days of the date of registration of the company. If the Board fails, it informs the members, who appoint within 90 days at an extraordinary general meeting. The first auditor holds office till the conclusion of the first AGM.

What is the term of an auditor?

At the first AGM the company appoints an auditor to hold office till the conclusion of its sixth AGM, and thereafter till the conclusion of every sixth meeting. This is the usual five year term.

Is auditor rotation compulsory for every company?

No. Section 139(2) applies to listed companies and the classes of companies prescribed by rules. An individual can serve one term of five consecutive years and an audit firm two terms, with a five year cooling off after that.

How is a casual vacancy filled?

The Board fills it within 30 days. If the vacancy is due to the auditor’s resignation, the company must also approve the appointment at a general meeting held within three months of the Board’s recommendation, and the appointee holds office till the next AGM.

Who appoints the auditor of a Government company?

The Comptroller and Auditor-General of India, within 180 days from the start of the financial year. The first auditor is appointed by the CAG within 60 days of registration.

Can an auditor be removed in the middle of the term?

Only by a special resolution of the company, after obtaining the previous approval of the Central Government, and after giving the auditor a reasonable opportunity of being heard.

What if no auditor is appointed at an AGM?

The existing auditor continues to be the auditor.

Official sources

Related reading

Disclaimer

This article is for general informational purposes only and should not be considered professional advice. Please consult a qualified expert for advice tailored to your specific situation. The author and website owner are not liable for any errors or actions based on this content.

Section 80GG: Deduction for Rent Paid Without HRA, Conditions and Limit

Posted on by CA Meet Dhrangadhariya

Last updated: 06 August 2026 · Written and reviewed by CA Meet Dhrangadhariya, CSM & Co LLP

Quick summary

  • Section 80GG gives a deduction for rent paid to an individual who gets no HRA exemption, including the self-employed.
  • The deduction is the least of ₹5,000 a month, 25% of total income, and rent paid minus 10% of total income.
  • You and your spouse and minor children must not own a residential house where you live or work, and you must file a rent declaration.
  • From Tax Year 2026-27 it is section 134 of the Income-tax Act, 2025 and the declaration is Form 31. It is available only in the old tax regime.

If you pay rent but do not get an HRA exemption, section 80GG lets you deduct part of the rent from your income. It suits self-employed people and employees whose salary has no HRA component. It is available only under the old tax regime.

From Tax Year 2026-27 the provision is section 134 of the Income-tax Act, 2025. For FY 2025-26 (assessment year 2026-27) it is still section 80GG of the 1961 Act.

Who can claim?

An individual who pays rent for furnished or unfurnished accommodation that they occupy as their own residence, and who:

  • gets no HRA exemption (no income falling under the HRA exemption of the Act),
  • does not own, and whose spouse or minor child (or HUF, for a HUF member) does not own, a residential house at the place where they ordinarily live or work, and
  • does not own another house that they occupy and that is valued as a self-occupied property under the house property rules.

How much can you claim?

The deduction is the least of:

  1. ₹5,000 a month, that is ₹60,000 a year.
  2. 25% of total income.
  3. Rent paid in the year minus 10% of total income.

Total income here means total income before allowing the 80GG deduction.

Example

Mr Shah is a consultant paying rent of ₹15,000 a month, so ₹1,80,000 a year. His total income before this deduction is ₹6,00,000.

Test Amount in ₹
Limit of ₹5,000 a month 60,000
25% of total income 1,50,000
Rent less 10% of income (1,80,000 less 60,000) 1,20,000
Deduction (the least) 60,000

Declaration: Form 10BA and Form 31

  • Up to FY 2025-26 you file Form 10BA to declare that you meet the conditions.
  • Under the Income-tax Rules, 2026 the declaration is Form 31 (Rule 65), filed for claiming the deduction under section 134.
  • The form asks for your name, address, PAN, the address of the premises, the months you stayed, the rent paid in cash and by other modes, and the landlord’s name, PAN and address. It also asks you to certify that no other residential accommodation is owned by you, your spouse or your minor child (or your family for a HUF) where you live or work.

Old regime and the due date

Section 80GG works only in the old regime. A person without business income opts for the old regime along with the return furnished by the due date. If you file late, the new regime applies and you lose the deduction. A person with business or professional income has to opt out of the new regime in the manner and time the Act prescribes.

How is it different from HRA?

Basis HRA exemption Section 80GG
Who Salaried, with HRA in salary Self-employed, or salaried without HRA
Limit Lowest of HRA, 50% or 40% of salary, rent less 10% of salary Least of ₹5,000 a month, 25% of income, rent less 10% of income
Regime Old regime only Old regime only
Both together? Not allowed Not allowed

Frequently asked questions

Who can claim section 80GG?

Individuals who pay rent for their own residence and get no HRA exemption, including the self-employed and employees without an HRA component.

What is the limit under section 80GG?

The least of ₹5,000 a month (₹60,000 a year), 25% of total income, and rent paid minus 10% of total income, all measured before this deduction.

Can I claim 80GG if I own a house?

Not if you, your spouse, minor child or HUF own a residential house at the place where you live or work, or if you own another house you occupy that is treated as self-occupied.

Which form do I need for section 80GG?

Form 10BA up to FY 2025-26, and Form 31 under the Income-tax Rules, 2026 from 01/04/2026.

Is section 80GG available in the new tax regime?

No. It is available only in the old tax regime.

Official sources

Related reading

Disclaimer

This article is for general informational purposes only and should not be considered professional advice. Please consult a qualified expert for advice tailored to your specific situation. The author and website owner are not liable for any errors or actions based on this content.

Income From House Property: How It Is Computed and Taxed (Tax Year 2026-27)

Posted on by CA Meet Dhrangadhariya

Last updated: 23 August 2026 · Written and reviewed by CA Meet Dhrangadhariya, CSM & Co LLP

Quick summary

  • Income from house property is the annual value of a building and its appurtenant land owned by you, less municipal taxes paid, a 30% standard deduction and interest on borrowed capital (sections 20 to 22 of the Income-tax Act, 2025).
  • The annual value is the higher of the rent the property could reasonably fetch and the actual rent; for up to two self-occupied houses it is nil.
  • A loss from house property can be set off against other income only up to ₹2,00,000 (old regime); the excess carries forward for 8 tax years against house property income. The new regime allows no set-off against other heads and no carry forward.
  • Co-owners with definite shares are taxed separately on their shares, and a person who is a deemed owner under section 25 is taxed as owner.

Rent from a house, flat, shop or office that you own is taxed under the head “Income from house property”. The head also applies to a house you live in, where the tax is nil but the home loan interest matters. From 01/04/2026 the rules are in sections 20 to 25 of the Income-tax Act, 2025 (they were sections 22 to 27 of the 1961 Act).

What is taxed under this head

  • Section 20(1): the annual value of property consisting of any building or land appurtenant to it (parking, garden or courtyard), owned by you.
  • Section 20(2): the head does not apply to the part of the property you occupy for your own business or profession, whose profits are taxed as business income.
  • Rent from a building, as such, is taxed here even if the tenant is a business. If the letting is itself your business, the income may be business income (see our post on house property income and business income).

Who is the “owner”

You are taxed as owner if you are the legal owner, or are treated as owner under section 25:

  • an individual who transfers a property to his or her spouse (other than under an agreement to live apart) or to a minor child (other than a married daughter) without adequate consideration;
  • the holder of an impartible estate;
  • a member of a co-operative society, company or association to whom a building is allotted or leased under a house building scheme;
  • a person allowed to take or retain possession in part performance of a contract (section 53A of the Transfer of Property Act, 1882);
  • a person who acquires rights in a building by sale, exchange or a lease of 12 years or more (month to month leases and leases up to one year are excluded).

Co-owners: where shares are definite and ascertainable, each co-owner is taxed on his or her own share and they are not an association of persons. The relief for self-occupied houses is available to each co-owner separately (section 24).

How income is computed

Step Rule
1. Annual value The higher of (a) the sum for which the property might reasonably be expected to let from year to year and (b) the actual rent received or receivable (section 21(1))
2. Adjust for vacancy If the property was let but vacant for part of the year and the actual rent is lower because of the vacancy, the annual value is the actual rent received or receivable (section 21(2))
3. Unrealised rent Rent that cannot be realised is left out, if the conditions in Rule 21 are met (below)
4. Less: local taxes Taxes levied by a local authority and actually paid by the owner during the tax year, whenever they fell due (section 21(3)). Taxes paid by a tenant are not deducted
5. Less: 30% of annual value Section 22(1)(a), whether or not you spent anything on repairs
6. Less: interest Interest on money borrowed to acquire, construct, repair, renew or reconstruct the property (section 22(1)(b)); see our post on home loan interest
Income from house property The balance, which can be a loss

The older provisions listed municipal value, fair rent and standard rent. Section 21 now speaks only of the sum the property can reasonably be expected to fetch. Municipal valuation and comparable local rents remain sensible evidence of that sum.

Unrealised rent (Rule 21)

Rent not paid by a tenant is left out when it is proved lost and irrecoverable, and:

  1. the tenancy is bona fide;
  2. the defaulting tenant has vacated, or steps have been taken to make him vacate;
  3. the tenant is not in occupation of any other property of yours; and
  4. you have taken all reasonable steps to sue for the rent, or satisfy the Assessing Officer that legal proceedings would be futile.

If you recover that rent later, it is taxed in the year you receive it, with a deduction of 30% (section 23).

Houses held as stock-in-trade

A builder’s unsold house that is not let at any time in the year has an annual value of nil up to two years from the end of the financial year in which the completion certificate is obtained (section 21(5), as amended by the Finance Act, 2026).

Self-occupied houses

The annual value of a house you occupy as your residence, or cannot occupy for any reason, is nil, but only for two houses that you specify (section 21(6) and (7)). It does not apply if the house is let at any time in the year or you get any other benefit from it. Any other house is taxed on its annual value even if it is vacant. Our post on deemed let-out property covers this.

With a nil annual value there is no 30% deduction. The only deduction is home loan interest, within the limits in section 22(2), and that creates a loss.

Examples

1. Let-out house. Rent ₹35,000 a month, so ₹4,20,000 a year. The reasonable rent is ₹3,90,000, municipal tax paid ₹12,000, loan interest ₹1,00,000.

  • Annual value: higher of 3,90,000 and 4,20,000 = ₹4,20,000
  • Less taxes paid: ₹12,000 = ₹4,08,000
  • Less 30%: ₹1,22,400
  • Less interest: ₹1,00,000
  • Income from house property = ₹1,85,600

2. Vacancy. A flat could fetch ₹40,000 a month (₹4,80,000 a year) but was vacant for two months, so rent received is ₹4,00,000. Because the actual rent is lower owing to vacancy, the annual value is ₹4,00,000.

3. Loss from a let-out house. Annual value less taxes ₹4,08,000, 30% deduction ₹1,22,400, interest ₹5,50,000. The result is a loss of ₹2,64,400.

  • Old regime: ₹2,00,000 is set off against other income, such as salary; the balance of ₹64,400 carries forward for up to eight tax years against house property income only.
  • New regime: the loss cannot be set off against any other head and it is not carried forward.

Arrears of rent

Arrears of rent received from a tenant, or unrealised rent realised later, are income from house property in the year of receipt, whether or not you still own the property, with a deduction of 30% (section 23).

House property loss: set-off and carry forward

Point Old regime New regime
Set-off against other house property income in the same year Yes Yes
Set-off against other heads Up to ₹2,00,000 (section 109(1)(b)) Not allowed (section 202(2)(b)(ii))
Carry forward of the balance Eight tax years, against house property income only (section 110) Not allowed (section 202(3))

Old and new section numbers

Topic 1961 Act 2025 Act
What is taxed Section 22 Section 20
Annual value Section 23 Section 21
Self-occupied houses Section 23(2) and (4) Section 21(6) and (7)
30% deduction and interest Section 24 Section 22
Arrears of rent Section 25A Section 23
Co-owners Section 26 Section 24
Deemed owner Section 27 Section 25
Set-off of loss Section 71 Section 109
Carry forward of loss Section 71B Section 110

The 1961 Act applies up to tax year 2025-26 (income of FY 2025-26); the 2025 Act applies from 01/04/2026.

Where to report it

Income from house property is reported in the house property schedule of the return. Give the address, whether the house is self-occupied, let out or otherwise, the co-owners and their shares, the rent, the taxes paid and the interest. Return forms with more than one house property, or with a loss to carry forward, need the fuller forms and not the simplest one. Check which form fits before you file.

Frequently asked questions

Which income is taxed under the head income from house property?

The annual value of any building or land appurtenant to it that you own (section 20). Property you occupy for your own business or profession is excluded, because its profits are taxed as business income.

How is annual value decided?

It is the higher of the sum for which the property could reasonably be expected to let from year to year and the actual rent received or receivable (section 21(1)). If it was let but stood vacant and the actual rent is lower because of the vacancy, the annual value is the rent actually received or receivable (section 21(2)).

What deductions are allowed?

Municipal and similar local taxes actually paid by the owner in the year, then 30% of the annual value and interest on borrowed capital (section 22). Nothing else, such as repairs or insurance, is allowed separately.

Can I have two self-occupied houses?

Yes. The annual value of up to two houses that you specify and occupy, or cannot occupy for any reason, is nil (section 21(6) and (7)). Any other house is taxed on its annual value even if it is vacant.

How much house property loss can I set off?

Under the old regime, up to ₹2,00,000 against income under other heads (section 109(1)(b)); any balance carries forward for eight tax years against house property income only (section 110). Under the new regime the loss cannot be set off against other heads and is not carried forward.

Who is taxed when a property is co-owned?

Each co-owner with a definite and ascertainable share, on that share. They are not taxed as an association of persons (section 24).

Official sources

Related reading

Disclaimer

This article is for general informational purposes only and should not be considered professional advice. Please consult a qualified expert for advice tailored to your specific situation. The author and website owner are not liable for any errors or actions based on this content.

Section 80G and 80GGA: Deduction for Donations, Limits and How to Claim

Posted on by CA Meet Dhrangadhariya

Last updated: 29 August 2026 · Written and reviewed by CA Meet Dhrangadhariya, CSM & Co LLP

Quick summary

  • Section 80G allows a deduction for donations to specified funds and charities, at 100% or 50%, with or without a limit of 10% of adjusted gross total income.
  • Donations must be in money, and a donation above ₹2,000 must be made by a mode other than cash.
  • Claims for donations to registered charities are allowed only on the basis of the information the charity reports to the department, so ask for the donation certificate.
  • Section 80GGA covers donations for scientific and social science research. Both sections are available only in the old tax regime and are sections 133 and 135 of the Income-tax Act, 2025 from Tax Year 2026-27.

How to claim the section 80G deduction

1. Donate to an eligible fund or registered charity by cheque, draft or online (cash only up to ₹2,000)
↓
2. Collect the donation receipt and the donation certificate from the charity
↓
3. Check that the donation shows in your pre-filled return data
↓
4. Work out the qualifying limit and the 100% or 50% share
↓
5. Claim the deduction in the old regime and report the donee details in the return

Donations to certain funds and charities reduce your taxable income under section 80G. Donations for scientific and social science research are covered by section 80GGA. Both work only under the old tax regime.

From Tax Year 2026-27 section 80G is section 133 and section 80GGA is section 135 of the Income-tax Act, 2025. For FY 2025-26 (assessment year 2026-27) the 1961 Act sections still apply.

Who can claim section 80G?

Any taxpayer who makes an eligible donation: individuals, HUFs, firms, companies and others, including NRIs. The deduction is 100% or 50% of the donation, depending on the donee, with or without a ceiling.

Mode of payment

  • The donation must be in money. Donations in kind (food, clothes, medicines, material) do not qualify.
  • A donation of up to ₹2,000 can be in cash. A donation above ₹2,000 must be by cheque, demand draft or an electronic mode.

Donations eligible at 100% with no limit

  • National Defence Fund.
  • Prime Minister’s National Relief Fund and PM CARES Fund.
  • Prime Minister’s Armenia Earthquake Relief Fund and the Africa (Public Contributions, India) Fund.
  • National Children’s Fund and National Foundation for Communal Harmony.
  • An approved university or educational institution of national eminence.
  • A fund set up by the Gujarat Government for earthquake relief.
  • A Zila Saksharta Samiti.
  • National and State Blood Transfusion Councils.
  • A State Government fund for medical relief to the poor.
  • Army Central Welfare Fund, Indian Naval Benevolent Fund and Air Force Central Welfare Fund.
  • Andhra Pradesh Chief Minister’s Cyclone Relief Fund, 1996.
  • National Illness Assistance Fund.
  • Chief Minister’s Relief Fund or Lieutenant Governor’s Relief Fund meeting the conditions of the Act.
  • National Sports Development Fund, National Cultural Fund and Fund for Technology Development and Application.
  • National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities.
  • Swachh Bharat Kosh and Clean Ganga Fund (not for CSR spending).
  • National Fund for Control of Drug Abuse.

Donations eligible at 100% subject to the 10% limit

  • Donations to the Government or an approved local authority, institution or association to promote family planning.
  • Donations by a company to the Indian Olympic Association or a notified association for sports infrastructure or sponsorship.

Donations eligible at 50% with no limit

  • Prime Minister’s Drought Relief Fund.

Donations eligible at 50% subject to the 10% limit

  • A fund or institution established in India for a charitable purpose that is a registered non-profit organisation (or approved as the Act provides).
  • The Government or a local authority, for any charitable purpose other than family planning.
  • An authority constituted for housing or for the planning and development of cities, towns and villages.
  • A corporation set up by the Central or a State Government to promote the interests of a minority community.
  • Repairs or renovation of a notified temple, mosque, gurudwara, church or other place of renown.

A purpose that is wholly or substantially religious is not a charitable purpose.

The 10% qualifying limit

The ceiling is 10% of the adjusted gross total income, which is gross total income less income on which tax is not payable and less other Chapter VIII deductions.

  1. Allow the donations eligible at 100% or 50% without a limit in full.
  2. For the donations subject to the limit, take the lower of the total of such donations and 10% of adjusted gross total income.
  3. Set off the 100% donations first. Any balance of the limit is used for the 50% donations, at 50%.
  4. Add the amounts to get your section 80G deduction.

Example

Mr X has an income of ₹7,00,000 and donates ₹1,60,000 to a charitable trust (50% with the limit). He is in the old regime.

Particulars Amount in ₹
Income before 80G 7,00,000
Donation 1,60,000
Qualifying limit (10% of 7,00,000) 70,000
Amount eligible (lower of donation and limit) 70,000
Deduction at 50% 35,000
Income after 80G 6,65,000
Tax comparison Amount in ₹
Tax before donation, with cess 54,600
Tax after donation, with cess 47,320
Tax saved 7,280

Proof and reporting of the donation

  • Ask the charity for a donation receipt with your name and address, the amount, the mode of payment and the charity’s PAN and registration details.
  • A registered charity must report your donation to the Income Tax Department every year and issue you a donation certificate. For FY 2025-26 these are the statement in Form 10BD and the certificate in Form 10BE. Under the Income-tax Rules, 2026 the statement is Form 113 and the certificate is Form 114.
  • Under section 133(6), your claim for a donation to such a charity is allowed only on the basis of the information the charity has reported, and is subject to verification. If the charity does not report it, you may lose the deduction. Check the donation in your pre-filled return data or the annual information statement.
  • In your return give the donee’s name, address and PAN, the amount, and the split between cash and other modes.

Section 80GGA: research donations

Section 80GGA (section 135 in the 2025 Act) allows a deduction of the full amount paid to:

  • a research association, university, college or other approved institution for scientific research, or
  • a research association, university, college or other approved institution for social science or statistical research.

Conditions:

  • It is not allowed if your gross total income includes business or professional income.
  • A cash donation above ₹2,000 does not qualify.
  • The claim is allowed on the basis of information reported by the payee, subject to verification.
  • The same amount cannot be claimed under any other provision.

The old section 80GGA also covered rural development, afforestation and poverty eradication funds. The 2025 Act does not list these, so do not rely on older articles for them.

Section 80G vs section 80GGA

Basis Section 80G Section 80GGA
Purpose Charity and relief funds Scientific and social science research
Rate 100% or 50% 100%
Limit 10% limit for some donations No limit
Business income Allowed Not allowed if GTI includes business or profession income
Cash Up to ₹2,000 Up to ₹2,000
Regime Old regime only Old regime only

Frequently asked questions

Who can claim section 80G?

Any taxpayer, including individuals, HUFs, firms and companies, but only if the donation is to an eligible fund or institution and the taxpayer is in the old tax regime where that applies.

Can I claim 80G for a cash donation?

Only up to ₹2,000. A donation above ₹2,000 must be paid by cheque, draft or online mode.

Are donations in kind allowed?

No. The deduction is allowed only for a donation made as a sum of money.

What is the 10% qualifying limit?

For certain donations, the amount eligible is limited to 10% of adjusted gross total income.

Is section 80G available in the new tax regime?

No. It is available only in the old tax regime.

Official sources

Related reading

Disclaimer

This article is for general informational purposes only and should not be considered professional advice. Please consult a qualified expert for advice tailored to your specific situation. The author and website owner are not liable for any errors or actions based on this content.

Section 80U: Tax Deduction for Individuals with Disability

Posted on by CA Meet Dhrangadhariya

Last updated: 06 August 2026 · Written and reviewed by CA Meet Dhrangadhariya, CSM & Co LLP

Quick summary

  • Section 80U gives a resident individual who is certified as a person with disability (40% or more) a flat deduction of ₹75,000, or ₹1,25,000 for severe disability (80% or more).
  • No bills are needed, but the disability certificate from the prescribed medical authority must be furnished with the return.
  • If the certificate needs reassessment after a period, the deduction stops after the year it expires until a new certificate is furnished.
  • From Tax Year 2026-27 it is section 154 of the Income-tax Act, 2025, and it is available only in the old tax regime.

Section 80U gives a fixed deduction from total income to a resident individual who has a certified disability. The amount does not depend on how much the person spends. It is available only under the old tax regime.

From Tax Year 2026-27 the provision is section 154 of the Income-tax Act, 2025. For FY 2025-26 (assessment year 2026-27) it is section 80U of the 1961 Act.

Amount of deduction

Condition Deduction
Person with disability (40% or more) ₹75,000
Person with severe disability (80% or more, including severe autism, cerebral palsy and multiple disabilities) ₹1,25,000

Who can claim?

A resident individual who is certified by the prescribed medical authority, at any time during the year, as a person with disability or severe disability. A HUF cannot claim.

The disabilities covered include blindness, low vision, leprosy-cured, hearing impairment, locomotor disability, mental retardation, mental illness, autism, cerebral palsy and multiple disabilities.

Disability certificate

  • You do not need bills or proof of expenses. You need the certificate.
  • A copy of the certificate from the prescribed medical authority must be furnished with your return of income. Up to FY 2025-26 the form for autism, cerebral palsy and multiple disabilities was Form 10-IA. Under the Income-tax Rules, 2026 the certificate form is Form 30.
  • If the certificate says the disability must be reassessed after a stipulated period, the deduction is not allowed for the years after the year in which the certificate expires, until you get and furnish a new certificate.
  • The medical authority can be a civil surgeon or chief medical officer of a government hospital, or a specialist as notified, for example a neurologist.

Old regime and the due date

Section 80U works only in the old regime. A person without business income chooses the old regime along with the return furnished by the due date. If you file late, the new regime applies and you lose the deduction. File on time.

Section 80U vs section 80DD

Parameter Section 80DD Section 80U
Who claims Resident individual or HUF supporting a dependant with disability Resident individual who has the disability
Spending needed? Yes, spent on care or paid into an approved scheme No
Amount ₹75,000 or ₹1,25,000 ₹75,000 or ₹1,25,000
Both for the same person? Not allowed Not allowed
Regime Old regime only Old regime only

Frequently asked questions

How much is the deduction under section 80U?

₹75,000 for a person with disability (40% or more) and ₹1,25,000 for severe disability (80% or more). It is a fixed amount.

Who can claim section 80U?

A resident individual who is certified by the medical authority, at any time during the year, as a person with disability or severe disability. A HUF cannot claim it.

Is a disability certificate required?

Yes. A copy of the certificate from the prescribed medical authority has to be furnished with the return.

Can I claim 80U and 80DD together?

Not for the same person. A person who claims 80U for themselves means nobody can claim 80DD for them.

Is section 80U available in the new tax regime?

No. It is available only in the old tax regime, and the old regime must be chosen when you file your return on time.

Official sources

Related reading

Disclaimer

This article is for general informational purposes only and should not be considered professional advice. Please consult a qualified expert for advice tailored to your specific situation. The author and website owner are not liable for any errors or actions based on this content.

Difference Between Exemption, Deduction and Rebate in Income Tax

Posted on by CA Meet Dhrangadhariya

Last updated: 29 July 2026 · Written and reviewed by CA Meet Dhrangadhariya, CSM & Co LLP

Quick summary

  • An exemption keeps a particular income out of tax altogether, a deduction reduces your taxable income, and a rebate reduces the tax you have to pay.
  • Examples: agricultural income is exempt, section 80C is a deduction, and the section 87A rebate cuts your computed tax.
  • For Tax Year 2026-27 the new regime gives a rebate of up to ₹60,000 if taxable income is up to ₹12 lakh; the old regime gives up to ₹12,500 if income is up to ₹5 lakh.
  • Most exemptions and deductions (HRA, 80C, 80D) work only in the old regime.

Exemption, deduction, rebate and relief are often used as if they mean the same thing. They do not. Each works at a different stage of the tax calculation, and knowing which is which helps you plan your tax and read your Form 16 correctly.

Exemption

An exemption makes a particular income tax-free. That income is left out of your total income, so it never enters the calculation.

Examples:

  • Agricultural income.
  • House rent allowance (HRA), within the prescribed limit, in the old regime.
  • Leave travel allowance (LTA), on the conditions of the rules, in the old regime.
  • Scholarships granted to meet the cost of education.
  • Gratuity and leave encashment on retirement, up to the limits allowed.

In the Income-tax Act, 2025, which applies from 01/04/2026, most of these exemptions are listed in the Schedules to the Act, while the old section 10 no longer exists as a single section.

Deduction

A deduction is an amount you subtract from your income, because you invested in or spent on something the law encourages. It reduces your taxable income, so the tax saved depends on your slab rate.

Examples:

  • Standard deduction on salary and pension.
  • Section 80C: up to ₹1.5 lakh for PPF, ELSS, life insurance and more.
  • Section 80D: health insurance premium. In the old regime, up to ₹25,000 for self, spouse and children (₹50,000 if a senior citizen), and the same again for parents.
  • Section 80E: interest on an education loan.
  • Section 24(b): home loan interest, up to ₹2 lakh for a self-occupied house.

Rebate

A rebate reduces the tax itself, after it has been computed on your taxable income. The main one is section 87A, available to resident individuals.

New regime (default) Old regime
Taxable income limit ₹12,00,000 ₹5,00,000
Maximum rebate ₹60,000 ₹12,500

These limits apply to Tax Year 2026-27 and to FY 2025-26. Marginal relief is available in the new regime for income slightly above ₹12 lakh. The rebate does not apply to special rate income, such as tax on short term capital gains under section 111A, so read the conditions before relying on it. See our article on the section 87A rebate for a full explanation.

Exemption vs deduction vs rebate: comparison table

Feature Exemption Deduction Rebate
Meaning A specific income is tax-free An amount subtracted from income An amount subtracted from tax
Stage Before total income is arrived at Before taxable income is arrived at After tax is computed
Effect Income is not taxed at all Reduces taxable income Reduces tax payable
Examples Agricultural income, HRA Section 80C, 80D, 80E Section 87A
Most are available in Mostly the old regime Mostly the old regime Both regimes

A note on tax deducted at source (TDS) and tax relief

Rebate, deduction and exemption are not the same as TDS. TDS is tax collected in advance by the payer, such as an employer or bank, on salary, interest, commission, rent or professional fees. It is later adjusted against your final tax, and any excess is refunded to you.

“Tax relief” is a general term for any provision that lowers your tax, including the three above and relief for double taxation. “Tax benefit” is used in the same loose way.

Which is better?

All three help, but they act differently. An exemption removes income completely. A deduction saves tax at your slab rate. A rebate saves a fixed amount of tax. Because most deductions and exemptions work only in the old regime, compare your tax under both regimes every year.

Frequently asked questions

What is the difference between a deduction and an exemption?

An exemption excludes a specific income from tax, for example agricultural income. A deduction is subtracted from your income, for example the section 80C deduction, to reach taxable income.

What is a tax rebate?

A rebate reduces the tax computed on your taxable income. Section 87A is the common example.

Is a rebate the same as a refund?

No. A rebate cuts your tax liability before you pay. A refund is money returned to you when your tax paid or deducted is more than your tax liability.

Which comes first in the calculation?

Exemptions are left out of income first, then deductions are subtracted, tax is calculated on the taxable income, and the rebate is applied to that tax.

Official sources

Related reading

Disclaimer

This article is for general informational purposes only and should not be considered professional advice. Please consult a qualified expert for advice tailored to your specific situation. The author and website owner are not liable for any errors or actions based on this content.

Section 80EE: Extra Deduction of Up to ₹50,000 on Home Loan Interest

Posted on by CA Meet Dhrangadhariya

Last updated: 26 September 2026 · Written and reviewed by CA Meet Dhrangadhariya, CSM & Co LLP

Quick summary

  • Section 80EE gives first-time home buyers an extra deduction of up to ₹50,000 a year on home loan interest, on top of the ₹2 lakh under section 24(b).
  • It applies only to loans sanctioned between 01/04/2016 and 31/03/2017, for a house worth up to ₹50 lakh with a loan up to ₹35 lakh, if you owned no house on the sanction date.
  • The deduction can still be claimed each year while that loan runs, only in the old tax regime.
  • From Tax Year 2026-27 it is section 130 of the Income-tax Act, 2025.

Section 80EE gave first-time home buyers an extra deduction of up to ₹50,000 a year on home loan interest. It was a limited-period scheme for loans sanctioned in FY 2016-17, but if you have such a loan you can still claim it every year until the loan ends, if you are in the old tax regime.

From Tax Year 2026-27 the provision is section 130 of the Income-tax Act, 2025. For FY 2025-26 (assessment year 2026-27) it is still section 80EE of the 1961 Act.

Conditions

  • Only an individual can claim (resident or non-resident). HUFs, firms and companies cannot.
  • The loan must be taken from a financial institution (a bank or housing finance company) to buy a residential house in India.
  • The loan must have been sanctioned between 01/04/2016 and 31/03/2017.
  • The loan amount must not exceed ₹35 lakh.
  • The value of the house must not exceed ₹50 lakh.
  • You must not have owned any residential house on the date the loan was sanctioned.
  • The same interest cannot be claimed under another section for that year or any other year.
  • It is available only in the old tax regime.

How much?

Up to ₹50,000 a year. Claim the interest first under section 24(b) (section 22 in the 2025 Act), which allows up to ₹2 lakh for a self-occupied house. If the interest is more, the balance can be claimed under 80EE, up to ₹50,000, so the total is up to ₹2,50,000. The total cannot exceed the interest you actually pay.

For a let-out house section 24(b) has no ₹2 lakh ceiling on interest, though the loss from house property that can be set off against other income is limited to ₹2 lakh a year.

Examples

  1. Sunita bought her first home for ₹45 lakh with a loan of ₹30 lakh sanctioned on 15/01/2017. She owned no house. She can claim up to ₹50,000 under section 80EE each year for the interest in excess of the section 24(b) limit.
  2. Rohan paid ₹2,40,000 as interest in a year. He claims ₹2,00,000 under section 24(b) and the remaining ₹40,000 under section 80EE. Total ₹2,40,000.
  3. Sonia’s house cost ₹52 lakh. She cannot claim, because the value exceeds ₹50 lakh.
  4. Ajay’s loan was ₹38 lakh. He cannot claim, because the loan exceeds ₹35 lakh.
  5. Two friends buy their first home together, each with a loan of ₹15 lakh, for a house worth ₹40 lakh. If each meets the conditions, each can claim up to ₹50,000.

Documents

  • The interest certificate from the lender, showing the principal and interest for the year.
  • The sanction letter and loan agreement, showing the sanction date and amount.
  • Papers that show the value of the house.

Section 24(b) vs section 80EE

Feature Section 24(b) Section 80EE
Interest allowed Up to ₹2 lakh for self-occupied house Extra up to ₹50,000
Who Individuals and HUFs Individuals only
Loan period Any Sanctioned 01/04/2016 to 31/03/2017
House value and loan limits None ₹50 lakh and ₹35 lakh
Regime Self-occupied house: old regime only. Let-out house: interest is also allowed in the new regime Old regime only

Section 80EE vs section 80EEA

Basis Section 80EE Section 80EEA
Loan sanctioned 01/04/2016 to 31/03/2017 01/04/2019 to 31/03/2022
Deduction ₹50,000 ₹1,50,000
Loan limit ₹35 lakh No limit
House value ₹50 lakh Stamp duty value up to ₹45 lakh

In the 2025 Act, section 80EE is section 130 and section 80EEA is section 131.

Frequently asked questions

Can I claim section 80EE for a loan taken now?

No. It is only for loans sanctioned between 01/04/2016 and 31/03/2017. If your loan was sanctioned then and meets the conditions, you can still claim it each year.

What is the limit under section 80EE?

₹50,000 a year, in addition to section 24(b).

Who can claim 80EE?

Only individuals who owned no residential house on the date the loan was sanctioned. HUFs and companies cannot.

Is it available if the house is let out?

The section does not require self-occupation, but the interest cannot be claimed twice under different sections.

Is section 80EE available in the new tax regime?

No. It is available only in the old tax regime.

Official sources

Related reading

Disclaimer

This article is for general informational purposes only and should not be considered professional advice. Please consult a qualified expert for advice tailored to your specific situation. The author and website owner are not liable for any errors or actions based on this content.

Section 80DDB: Deduction for Medical Treatment of Specified Diseases

Posted on by CA Meet Dhrangadhariya

Last updated: 06 September 2026 · Written and reviewed by CA Meet Dhrangadhariya, CSM & Co LLP

Quick summary

  • Section 80DDB allows a deduction for the amount actually paid on treatment of specified serious diseases, up to ₹40,000, or up to ₹1,00,000 if the patient is a senior citizen.
  • The deduction is reduced by any amount received from insurance or reimbursed by an employer, so only your net out-of-pocket cost counts.
  • It covers you and your dependants (spouse, children, parents, brothers and sisters), and needs a prescription from the specialist named in the rules.
  • From Tax Year 2026-27 it is section 128 of the Income-tax Act, 2025, and it is available only in the old tax regime.

How to claim the section 80DDB deduction

1. Check that the illness is on the specified list
↓
2. Get a prescription from the specialist named for that disease
↓
3. Pay the treatment cost and keep the bills
↓
4. Reduce the claim by insurance or employer reimbursement
↓
5. Claim the balance, up to ₹40,000 or ₹1,00,000, in the old regime

Treating a serious illness is expensive. Section 80DDB lets a resident individual or HUF deduct what they actually pay on the treatment of certain specified diseases, up to a limit. It reduces taxable income, and is available only under the old tax regime.

From Tax Year 2026-27 the provision is section 128 of the Income-tax Act, 2025. For FY 2025-26 (assessment year 2026-27) it is section 80DDB of the 1961 Act.

Who can claim?

  • A resident individual, for treatment of self or a dependant.
  • A HUF, for treatment of any of its members.
  • A dependant means the spouse, children, parents, brothers and sisters of the individual. Companies and other entities cannot claim.

Deduction limit

Patient Maximum deduction
Under 60 years ₹40,000
Senior citizen (60 or more at any time during the year) ₹1,00,000

The deduction is the amount actually paid or the limit, whichever is less. It is then reduced by any amount received under an insurance policy or reimbursed by an employer for that treatment.

Examples

  1. You pay ₹80,000 for treatment and get ₹30,000 from the insurer. For a patient under 60, the limit is ₹40,000 (less than the ₹80,000 paid), so the deduction is ₹40,000 less ₹30,000, which is ₹10,000. For a senior citizen the amount paid (₹80,000) is less than the limit of ₹1,00,000, so the deduction is ₹80,000 less ₹30,000, which is ₹50,000.
  2. You pay ₹80,000 and the insurer pays ₹60,000. For a patient under 60 it is ₹40,000 less ₹60,000, so there is no deduction. For a senior citizen it is ₹80,000 less ₹60,000, which is ₹20,000.

In short, take the lower of the amount paid and the limit, then subtract what the insurer or employer paid.

Diseases covered and who must prescribe

Disease Specialist who must prescribe
Specified neurological diseases where disability is 40% or more: dementia, dystonia musculorum deformans, motor neuron disease, ataxia, chorea, hemiballismus, aphasia and Parkinson’s disease Neurologist with D.M. in Neurology
Malignant cancers Oncologist with D.M. in Oncology
Full blown AIDS Any specialist with a post-graduate degree in General or Internal Medicine
Chronic renal failure Nephrologist with D.M. in Nephrology, or urologist with M.Ch. in Urology
Haemophilia and thalassaemia Specialist with D.M. in Haematology

An equivalent degree recognised by the Medical Council of India is also accepted. If the patient is treated in a government hospital, a full-time specialist of that hospital with a post-graduate degree in General or Internal Medicine (or equivalent) can give the prescription.

What should the prescription show?

  • The patient’s name and age.
  • The disease or ailment.
  • The name, address, registration number and qualification of the specialist.
  • For a government hospital, the hospital’s name and address.

How to claim

  1. Keep the specialist’s prescription and the bills.
  2. Subtract any insurance claim or employer reimbursement.
  3. Report the net amount, within the limit, in the deductions section of your return.
  4. Choose the old regime. The deduction is not available in the new regime.

Frequently asked questions

What is the limit under section 80DDB?

₹40,000, or ₹1,00,000 if the patient is a senior citizen (60 or more at any time during the year). The claim is the amount paid or the limit, whichever is less, reduced by any insurance or reimbursement.

Which diseases are covered?

Specified neurological diseases (with 40% or more disability), malignant cancers, full blown AIDS, chronic renal failure, and haemophilia and thalassaemia.

Is a prescription needed?

Yes, from the specialist named in the rules for that disease. If treated in a government hospital, a full-time specialist of that hospital can give it.

Who counts as a dependant?

The spouse, children, parents, brothers and sisters of an individual, or a member of a HUF.

Is section 80DDB available in the new tax regime?

No. It is available only in the old tax regime.

Official sources

Related reading

Disclaimer

This article is for general informational purposes only and should not be considered professional advice. Please consult a qualified expert for advice tailored to your specific situation. The author and website owner are not liable for any errors or actions based on this content.

Section 80DD: Deduction for Dependant with Disability, Limit and Who Can Claim

Posted on by CA Meet Dhrangadhariya

Last updated: 11 July 2026 · Written and reviewed by CA Meet Dhrangadhariya, CSM & Co LLP

Quick summary

  • Section 80DD gives a resident individual or HUF a flat deduction of ₹75,000 for a dependant with disability (40% or more), or ₹1,25,000 for severe disability (80% or more).
  • It does not depend on the actual amount spent, but you must have spent on the dependant’s medical treatment, nursing, training or rehabilitation, or paid into an approved insurer scheme for their maintenance.
  • The dependant is the spouse, children, parents, brothers or sisters, and cannot be someone who claims section 80U for themselves.
  • From Tax Year 2026-27 the provision is section 127 of the Income-tax Act, 2025. It is available only in the old tax regime.

Section 80DD helps families who look after a dependant with a disability. A resident individual or Hindu undivided family (HUF) gets a fixed deduction from income, whatever the actual expense, provided they spent on the dependant’s care or paid into an approved scheme for the dependant’s future. It is available only under the old tax regime.

From Tax Year 2026-27 the provision is section 127 of the Income-tax Act, 2025. For FY 2025-26 (assessment year 2026-27) it is still section 80DD of the 1961 Act.

Amount of deduction

Disability of the dependant Deduction
40% or more, but less than 80% ₹75,000
Severe disability: 80% or more, including autism, cerebral palsy and multiple disabilities certified as severe ₹1,25,000

The amount is fixed. You do not need bills for the amount you claim, but you must actually have incurred the spending, or paid the scheme premium, in that year.

Conditions

  • The claimant must be a resident individual or HUF.
  • The dependant is, for an individual, the spouse, children, parents, brothers and sisters. For a HUF, it is a member of the HUF. The dependant must be dependent wholly or mainly on the claimant.
  • The claim is for a dependant, not for yourself. If you have a disability yourself, see section 80U.
  • The dependant must not claim a deduction under section 80U (section 154 in the new Act) for themselves. If they do, 80DD cannot be claimed for them.
  • You must either (a) spend on medical treatment (including nursing), training and rehabilitation of the dependant, or (b) pay or deposit an amount under an approved scheme of the Life Insurance Corporation or another insurer for the dependant’s maintenance.
  • For the insurance route, the scheme must pay an annuity or lump sum to the dependant on your death, or when you reach 60, and you must name the dependant (or a trust or other person for the dependant) to receive it.

Disabilities covered

The disability must be certified by the medical authority. The list includes blindness, low vision, leprosy-cured, hearing impairment, locomotor disability, mental retardation, mental illness, autism, cerebral palsy and multiple disabilities.

Certificate and documents

  • The disability must be certified by the prescribed medical authority, such as a civil surgeon or chief medical officer of a government hospital, or a specialist neurologist where the rules provide.
  • A copy of the certificate must be furnished with your return of income. Up to FY 2025-26 the form for autism, cerebral palsy and multiple disability was Form 10-IA. Under the Income-tax Rules, 2026 the certificate form is Form 30.
  • If the certificate says the disability needs reassessment after a period, the deduction stops after the year the certificate expires, until you furnish a new certificate.
  • If you claim the insurance route, keep the premium receipts and the policy terms.

Section 80DD vs section 80U

Basis Section 80DD Section 80U
Who claims A resident individual or HUF who supports a dependant with disability A resident individual with disability, for themselves
Amount ₹75,000, or ₹1,25,000 for severe disability ₹75,000, or ₹1,25,000 for severe disability
Both for the same person? Not allowed Not allowed
Regime Old regime only Old regime only

If the dependant dies first

If the dependant dies before you, the amount paid or deposited under the insurance scheme is treated as your income of the year in which you receive it, and is taxed.

Remember

The deduction is in addition to other deductions such as section 80C or 80D. Check your tax under both regimes, because 80DD, like most deductions, is lost in the new regime.

Frequently asked questions

How much is the deduction under section 80DD?

₹75,000 if the dependant has a disability of 40% or more, and ₹1,25,000 if the disability is severe (80% or more). It is a fixed amount, not the actual expense.

Who is a dependant for section 80DD?

For an individual, the spouse, children, parents, brothers and sisters. For a HUF, a member of the HUF.

Can I claim 80DD if the dependant claims section 80U?

No. If the dependant claims 80U for themselves, you cannot claim 80DD for the same person.

Is a medical certificate needed?

Yes. A certificate from the prescribed medical authority has to be furnished with the return.

Is section 80DD available in the new tax regime?

No. It is available only in the old tax regime.

Official sources

Related reading

Disclaimer

This article is for general informational purposes only and should not be considered professional advice. Please consult a qualified expert for advice tailored to your specific situation. The author and website owner are not liable for any errors or actions based on this content.