New Tax Benefit For The Disabled

One of the positives of Budget 2022 was the change in tax rules for insurance policies bought by parents or guardians to take care of a differently abled dependant. If you, as a parent or guardian of a differently abled individual, had taken insurance for the maintenance of your ward, the existing provision of Section 80DD of the Income-tax Act allows tax deduction on the premium you pay for the scheme. But there’s a condition—the tax benefit is available only if the differently abled dependant, who is the beneficiary, gets the lump sum or annuity in the event of the death of the proposer (parent or guardian). Budget 2022 has changed this. “It is now proposed to allow the deduction of policy premium even where the payment of annuity or lump sum amount to the disabled dependant is made during the lifetime of the proposer (parent/guardian), i.e. upon (the proposer)...