Tax Laws and Practice · Deductions

Deduction for Person with Disability and Medical Treatment

Updated 11 October 2026 · Fact-checked

The Income-tax Act, 2025 gives three deductions. Section 154 gives a resident individual who is certified disabled ₹75,000, or ₹1,25,000 if severely disabled. Section 127 gives the same amounts for a disabled dependant's care. Section 128 gives the lower of actual payment or ₹40,000 (₹1,00,000 for a senior citizen) for specified diseases.

Understand Deductions for Persons with Disability and Medical Expenses

These three sections give tax relief for the cost of disability and serious illness. Each one is a deduction, so it reduces income and not tax directly. Learn them as three separate doors and check which one the facts open.

Section 154 is for you. A resident individual, certified by a medical authority at any time during the tax year as a person with disability, gets a flat deduction of ₹75,000. If the person has severe disability, the flat deduction is ₹1,25,000. No expenditure is needed. The certificate is what matters.

Section 127 is for a dependant. A resident individual or HUF gets ₹75,000, or ₹1,25,000 where the dependant has severe disability. It is available if you either spent on medical treatment (including nursing), training and rehabilitation of the dependant, or paid or deposited an amount under a scheme of the Life Insurance Corporation, another insurer, the Administrator or the specified company, approved by the Board, for the maintenance of the dependant. Again the deduction is a fixed amount, not the amount spent.

Section 128 is for treatment of specified diseases, as prescribed. A resident assessee gets the actual amount paid or ₹40,000, whichever is less. For an individual, the treatment must be for himself or a dependant. For a HUF, it must be for a member of the HUF. Where the person treated (the assessee, the dependant or the HUF member) is a senior citizen, the cap becomes ₹1,00,000. You need a prescription from a specialist such as a neurologist, oncologist, urologist, haematologist or immunologist, or another prescribed specialist. Any insurance or employer reimbursement reduces the deduction.

Person with disability means a person certified by a medical authority as having at least 40% of a disability. A person below 40% does not qualify under Sections 154 or 127.

Severe disability means 80% or more of one or more disabilities, or severe disability as defined in the National Trust Act, 1999. A person with disability who is below that level gets the lower amount.

Key rules to remember

Own disability deduction (Section 154): Disability: ₹75,000 | Severe disability: ₹1,25,000; Flat amount for a resident individual certified by a medical authority. No proof of spending is required.
Dependant with disability (Section 127): Disability: ₹75,000 | Severe disability: ₹1,25,000; Available to a resident individual or HUF. Either expenditure on treatment, training and rehabilitation, or payment under a Board-approved scheme. Fixed amount.
Specified disease treatment (Section 128): Step 1: Deduction = lower of (actual amount paid, ₹40,000); where the person treated is a senior citizen, lower of (actual amount paid, ₹1,00,000). Step 2: Final deduction = Step 1 deduction − insurance received or employer reimbursement; The higher limit depends on the age of the person treated: the assessee, the dependant or the HUF member. Under Section 128(3), the deduction itself is reduced by any amount received from an insurer or reimbursed by an employer. So apply the cap first, then subtract the receipt. A specialist prescription is needed.
Person with disability: Person with disability = at least 40% of a disability, as certified by a medical authority; Below 40%, no deduction under Section 154 or 127. At 40% or more but below 80%, the lower amount of ₹75,000 applies.
Severe disability: Severe disability = 80% or more of one or more disabilities; Also includes severe disability under the National Trust Act, 1999.
Scheme payout condition (Section 127(2)): Payout on death of subscriber, or on subscriber reaching 60 years with payments stopped; The assessee must also nominate the dependant or another person or trust to receive the payments.
Death of dependant (Section 127(4)): Amount paid or deposited is deemed income of the assessee in the tax year it is received; Applies if the dependant dies before the subscriber. It does not apply to amounts the dependant already received as annuity or lump sum under the 60-year condition.

How to solve Deductions for Persons with Disability and Medical Expenses questions

Use this method for any question on disability or medical deductions. Decide which section applies before you touch the numbers.

1Check residence. All three sections need an assessee who is resident in India. Section 154 is only for individuals. Sections 127 and 128 cover individuals and HUFs.
2Identify who is disabled or ill: the assessee himself (Section 154), a dependant with disability (Section 127), or a person treated for a specified disease (Section 128). Under Section 128, an individual may claim for himself or a dependant, and a HUF may claim for any member of the HUF.
3Test the dependant. For an individual, a dependant is the spouse, children, parents, brothers or sisters, wholly or mainly dependent on him for support and maintenance. For a HUF, it is a member of the HUF.
4Check the level of disability from the certificate. Below 40% is not a disability for these sections. At 40% or more, disability gives ₹75,000. Severe disability (80% or more, or as defined in the National Trust Act) gives ₹1,25,000.
5For Section 128, first take the lower of the amount actually paid and ₹40,000 (₹1,00,000 if the person treated is a senior citizen). Then reduce that deduction by any insurance received or employer reimbursement, as Section 128(3) requires.
6Check conditions: medical certificate filed with the return under section 263, certificate not expired, specialist prescription for Section 128, and scheme conditions for Section 127(1)(b).
7Check for overlap. A dependant who himself claims under Section 154 cannot be the basis of a Section 127 claim.
8Add up the deductions and state your conclusion with section references.

Quickest way: Three-question shortcut

When to use it: Use it for short numerical questions where you must give the deduction quickly.

Ask: whose disability or illness is it? Self gives Section 154, dependant gives Section 127, specified disease gives Section 128.
For Sections 154 and 127, write ₹75,000 or ₹1,25,000 straight from the severity. Ignore the actual expense.
For Section 128, write: lower of actual paid and the cap (₹40,000, or ₹1,00,000 for a senior citizen), then subtract insurance or reimbursement. Finish with one line on the certificate or prescription condition.

Common mistakes in Deductions for Persons with Disability and Medical Expenses

Claiming the actual expenditure under Section 127 or 154 instead of the fixed amount.
Students mix these sections with Section 128, where the actual payment matters.
Fix: Remember that Sections 154 and 127 give flat amounts. Only Section 128 uses the lower of actual payment and the cap.
Allowing a Section 127 deduction for a dependant who claims Section 154 himself.
Students forget the exclusion in Section 127(8).
Fix: Check whether the dependant has claimed deduction under Section 154 for the same tax year. If yes, Section 127 is not available for him.
Not reducing the Section 128 claim by insurance or employer reimbursement, or subtracting it before applying the cap.
Students compare the total bill with the cap and stop, or net off the receipt from the bill too early.
Fix: First take the lower of the amount paid and the cap. Then deduct the amount received from the insurer or reimbursed by the employer from that deduction, as Section 128(3) says. For example, ₹1,20,000 paid, ₹30,000 insured, senior citizen: ₹1,00,000 − ₹30,000 = ₹70,000.
Applying ₹1,00,000 when the patient is not a senior citizen.
Students read the higher limit as the usual one.
Fix: The higher limit is only where the person is a senior citizen. Otherwise the cap is ₹40,000.
Ignoring the certificate conditions.
Students focus on the amount and forget that the claim is conditional.
Fix: State that a copy of the medical certificate must be furnished with the return under section 263, and that an expired certificate blocks later years until a new one is filed.
Treating a deposit under the Section 127 scheme as permanently tax-free when the dependant dies first.
Students stop at the deduction and miss sub-section (4).
Fix: If the dependant dies before the subscriber, the amount paid or deposited is deemed income of the assessee in the tax year it is received.

Worked examples

Example 1

Rohan, a resident individual, has a certificate from a medical authority showing 85% disability. He also paid ₹30,000 for treatment of his disabled brother, who is wholly dependent on him, has a medical authority's certificate showing 50% disability and has no claim of his own. Compute the deductions available to Rohan under Sections 154 and 127.

Show the solution

Section 154: Rohan is a resident individual certified as having disability of 85%. This is 80% or more, so it is severe disability. Deduction is ₹1,25,000.
Section 127: The brother is a dependant, being a brother wholly dependent on Rohan.
A person with disability means a person certified as having at least 40% of a disability. The brother's 50% meets this, so he is a person with disability. It is below 80%, so he is not a person with severe disability.
The brother has not claimed under Section 154, so Section 127(8) does not bar the claim. Rohan incurred expenditure on treatment, so the condition in Section 127(1)(a) is met.
The Section 127 deduction is the fixed ₹75,000, not the ₹30,000 actually spent.
Total = ₹1,25,000 + ₹75,000 = ₹2,00,000. Both claims need the medical certificates (Rohan's and his brother's) to be furnished with the return under section 263.

Answer: Rohan can claim ₹1,25,000 under Section 154 and ₹75,000 under Section 127, a total of ₹2,00,000, subject to filing the certificates with his return.

Example 2

Meera, a resident individual aged 35, spent ₹52,000 on treatment of a specified disease for her father, aged 66 and wholly dependent on her, on a neurologist's prescription. The insurer paid ₹20,000 of this. Compute the deduction under Section 128. What would it be if the insurer had paid only ₹5,000?

Show the solution

Section 128 applies as the treatment is for a dependant, the father, and a neurologist's prescription is available.
The father, the person treated, is a senior citizen, so the cap is ₹1,00,000.
Deduction before insurance = lower of ₹52,000 paid and ₹1,00,000 = ₹52,000.
Reduce by insurance under Section 128(3): ₹52,000 − ₹20,000 = ₹32,000.
Second case: deduction before insurance is still ₹52,000. ₹52,000 − ₹5,000 = ₹47,000.

Answer: Deduction is ₹32,000 in the first case and ₹47,000 in the second. The higher cap of ₹1,00,000 applies because the father is a senior citizen, but the amount paid is below it, so the cap does not bite.

Exam tips

Write the section number with the amount every time. Examiners give marks for the provision, the application and the conclusion.
Read each fact for residence, relationship, dependency and certificate. Many questions hide a failed condition in one line.
In comparison questions, make a short table of points in words: who claims, basis of amount, need for expenditure, and limits. Keep the difference between Sections 154 and 127 clear.
Where the question gives insurance or reimbursement, expect a Section 128 calculation. Cap first, then reduce the deduction by the receipt.
Mention the filing condition: certificate furnished with the return of income under section 263.

Practice questions from Deductions

Deductions for Persons with Disability and Medical Expenses in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Deductions for Persons with Disability and Medical Expenses: frequently asked questions

What is the difference between the deduction for disability and for severe disability?

A person with disability gets ₹75,000 and a person with severe disability gets ₹1,25,000. Severe disability means 80% or more of one or more disabilities, or severe disability as defined in the National Trust Act, 1999. The same two amounts apply under both Section 154 and Section 127.

Do I need to show expenses to claim the deduction under Section 154?

No. Section 154 gives a fixed deduction to a resident individual certified by a medical authority. You need the certificate filed with the return, not bills. Section 127(1)(a) also gives a fixed amount, though it requires that you incurred expenditure on the dependant.

Who is a dependant under Section 127?

For an individual, it is the spouse, children, parents, brothers and sisters, or any of them, who depend wholly or mainly on the individual for support and maintenance. For a HUF, it is a member of the HUF. A person who claims deduction under Section 154 himself is excluded.

How much can I claim under Section 128 for treatment of specified diseases?

You can claim the amount actually paid or ₹40,000, whichever is less. If the person treated is a senior citizen, the limit is ₹1,00,000. Insurance received or employer reimbursement reduces the claim, and you need a specialist's prescription.

What happens if the disability certificate expires?

If the certificate says the disability must be reassessed after a stated period, the deduction is not allowed for tax years after the year of expiry. You must obtain a new certificate and file a copy with the return under section 263 to claim again.