Deduction for Disabled Dependant and Medical Treatment 2026-27: Sections 127, 128 and 154 (Income Tax Act 2025)
The Income Tax Act 2025 has three separate deductions for disability and serious illness. Section 127 is for looking after a dependant with disability: Rs 75,000, or Rs 1,25,000 for severe disability. Section 128 is for treating prescribed diseases: the lower of the amount paid or Rs 40,000, rising to Rs 1,00,000 for a senior citizen. Section 154 is for a resident individual who is certified as disabled: Rs 75,000 or Rs 1,25,000.
All three need paperwork: a medical authority's certificate, or a specialist's prescription, filed or held as the rules require. They sit in Chapter VIII, so under the default regime in section 202(1) they are not available at all unless you opt out under section 202(4). The figures below are from the Act as amended by the Finance Act, 2026, and the Income-tax Rules, 2026, for tax year 2026-27.
Which section applies to my situation?
Can I claim these deductions under the default tax regime?
Usually not. Under section 202(2)(a)(xii), the default regime computes total income without any Chapter VIII deduction other than sections 124(1), 124(2), 125(2) and 146. Sections 127, 128 and 154 are not on that list. To claim them you must opt out of section 202(1) under section 202(4). A person with no business or profession income makes that choice along with the return under section 263(1); a person with business or profession income must do it on or before the return due date, and the option then carries to later years with limited withdrawal (section 202(4)(a)).
Section 122(2) also caps the total of all Chapter VIII deductions at your gross total income. For the wider picture, see our overview of Chapter VIII deductions.
What is the deduction for a dependant with disability (section 127)?
A resident individual or HUF can claim up to Rs 75,000 (section 127(1)), or Rs 1,25,000 if the dependant has severe disability (section 127(3)). The deduction is available if, during the year, you either:
- spent money on medical treatment (including nursing), training and rehabilitation of the dependant (section 127(1)(a)); or
- paid or deposited an amount under a scheme of the Life Insurance Corporation or another insurer, or the Administrator or the specified company, for the dependant's maintenance, on conditions the Board has approved (section 127(1)(b)).
For the scheme route, the scheme must pay an annuity or lump sum for the dependant either on your death, or when you reach 60 and the payments or deposits have stopped. You must also nominate the dependant, another person or a trust to receive the money for the dependant's benefit (section 127(2)).
Who counts as a dependant?
For an individual, the spouse, children, parents, brothers and sisters, wholly or mainly dependent on you for support and maintenance. For an HUF, a member of the HUF who is dependent on it in the same way (section 127(9)(b)). A dependant who has claimed the section 154 deduction in his or her own return does not qualify (section 127(8)).
What is "severe disability"?
A person with 80% or more of one or more disabilities under section 56(4) of the Persons with Disabilities Act, 1995, or a person with severe disability under section 2(o) of the National Trust Act, 1999 (section 127(9)(g)). Autism, cerebral palsy and multiple disability are covered in the definition of disability (section 127(9)(c)).
What is the deduction for medical treatment of specified diseases (section 128)?
A resident assessee can deduct the amount actually paid during the tax year or Rs 40,000, whichever is less, for treatment of a prescribed disease or ailment, for self or a dependant (individual) or any HUF member (section 128(1)). If the person treated is a senior citizen, the limit becomes Rs 1,00,000 (section 128(4)). A senior citizen is a resident individual aged 60 or more at any time in the tax year (section 2(100)).
Two conditions apply. First, you must get a prescription from a specialist (section 128(2)). Second, the deduction is reduced by any amount received from an insurer or reimbursed by an employer for that treatment (section 128(3)).
Which diseases and which specialist? (rule 62)
| Disease or ailment | Who must issue the prescription |
|---|---|
| Neurological diseases with certified disability of 40% or more: dementia, dystonia musculorum deformans, motor neuron disease, ataxia, chorea, hemiballismus, aphasia, Parkinson's disease | Neurologist with a D.M. in Neurology |
| Malignant cancers | Oncologist with a D.M. in Oncology |
| Full blown AIDS | Any specialist with a post-graduate degree in General or Internal Medicine |
| Chronic renal failure | Nephrologist with a D.M. in Nephrology, or Urologist with an M.Ch. in Urology |
| Haemophilia, thalassaemia | Specialist with a D.M. in Hematology |
Rule 62(2) accepts an equivalent degree recognised by the Medical Council of India. Under rule 62(3), if the patient is treated in a Government hospital, a full-time specialist with a post-graduate degree in General or Internal Medicine can issue the prescription. Rule 62(4) sets the format: patient name and age, description of the disease, and the specialist's signature, name, qualification, address and registration number (plus the hospital's name and address for a Government hospital).
What is the deduction for a person with disability (section 154)?
A resident individual who is certified by a medical authority, at any time in the tax year, as a person with disability or severe disability gets a deduction of Rs 75,000 or Rs 1,25,000 respectively (section 154(1)). There is no spending test. The conditions are paperwork: furnish the certificate, and if it carries an expiry, get a new one for later years, all filed with the return under section 263 (section 154(2)).
What certificate is needed, and who can issue it?
| Point | Rule |
|---|---|
| Certificate for autism, cerebral palsy, multiple disability (including severe) | Form No. 30, issued by a Neurologist with an MD in Neurology (a Paediatric Neurologist for children), or a Civil Surgeon or Chief Medical Officer in a Government hospital (rule 61(1), (2)(a)) |
| Certificate for other disabilities | The form in the 2001 and 2002 notifications mentioned in rule 61(2)(b), under the disability evaluation guidelines |
| Where to furnish | Copy with the return of income under section 263, for the year of the claim (sections 127(6), 154(2)(c)) |
| Temporary disability | Certificate is valid from the tax year of issue to the tax year in which its validity expires (rule 61(3)); no deduction for later years without a new certificate (sections 127(7), 154(2)(b)) |
How are the deductions calculated? Two worked examples
Example 1: section 127, severe disability (tax year 2026-27). Meena, a resident individual, has opted out of section 202(1). Her father is wholly dependent on her and holds a medical authority's certificate showing severe disability. She spent Rs 1,60,000 on nursing and therapy during the year. She has no other Chapter VIII deduction.
| Step | Amount (Rs) |
|---|---|
| Gross total income | 9,00,000 |
| Expenditure on nursing and therapy | 1,60,000 |
| Limit for severe disability, section 127(3) | 1,25,000 |
| Deduction (expenditure exceeds the limit) | 1,25,000 |
| Total income (9,00,000 - 1,25,000) | 7,75,000 |
Example 2: section 128 in three cases (tax year 2026-27). Each person has opted out of section 202(1) and holds a valid prescription from the right specialist.
| Case | Paid (Rs) | Insurance or employer refund (Rs) | Limit (Rs) | Working | Deduction (Rs) |
|---|---|---|---|---|---|
| Ravi, treatment of his father (aged 68) for Parkinson's, disability certified at 45% | 1,30,000 | 0 | 1,00,000 (senior citizen) | Lower of 1,30,000 and 1,00,000 | 1,00,000 |
| Sunita (aged 40), own cancer treatment | 25,000 | 5,000 | 40,000 | Lower of 25,000 and 40,000 = 25,000, less 5,000 | 20,000 |
| Imran (aged 45), own chemotherapy | 70,000 | 0 | 40,000 | Lower of 70,000 and 40,000 | 40,000 |
In the second case the refund is small enough that both ways of reading the "reduced by" wording give Rs 20,000. If your refund is large, check the treatment with your chartered accountant before filing.
What do these rules look like in real life?
A sister who earns her own income. Arjun supports his sister Divya, who has a 60% disability. Divya works and files her own return, where she claims the section 154 deduction of Rs 75,000. Because she has claimed it, Arjun cannot treat her as a dependant for section 127 (section 127(8)). Had she not claimed under section 154, he could have claimed for her care.
A scheme where the dependant dies first. Kavita deposits money each year in an approved insurer's scheme for her son, who has a disability, and claims section 127(1)(b) every year. If her son dies before her, the amount she deposited is treated as her income in the tax year she receives it back, and is taxed (section 127(4)). Money the son already received as an annuity or lump sum under the "age 60" condition is not caught (section 127(5)).
A certificate that runs out. Rohan holds a certificate for a temporary disability issued in August 2026 (tax year 2026-27), valid until March 2029. Under rule 61(3) it covers tax years 2026-27 to 2028-29. For 2029-30 he needs a fresh certificate filed with that year's return, or the deduction is lost (section 154(2)(b)).
A paperwork miss. Neha pays Rs 90,000 for her mother's (aged 64) dialysis. The nephrologist's prescription exists, but she never obtained one in the rule 62(4) format and cannot produce it. Section 128(2) makes the prescription a condition, so the claim is exposed.
Quick reference
| Section 127 | Section 128 | Section 154 | |
|---|---|---|---|
| Who claims | Resident individual or HUF | Resident assessee (individual or HUF) | Resident individual with disability |
| Normal amount | Up to Rs 75,000 | Lower of paid or Rs 40,000 | Rs 75,000 |
| Higher amount | Rs 1,25,000 (severe disability) | Rs 1,00,000 (senior citizen) | Rs 1,25,000 (severe disability) |
| Key document | Medical authority certificate, Form No. 30 or other prescribed form | Specialist prescription, rule 62(4) format | Medical authority certificate |
| Reduced by insurance or reimbursement | Not stated in the section | Yes, section 128(3) | Not stated in the section |
| Filed with return under s.263 | Certificate copy | Not stated in section 128 | Certificate copy |
What are the common mistakes?
- Claiming under the default regime. Sections 127, 128 and 154 are outside the Chapter VIII deductions kept alive by section 202(2)(a)(xii). Opt out under section 202(4) first.
- Claiming for a dependant who claims section 154. Section 127(8) rules this out.
- Not filing the certificate with the return. The certificate copy goes with the return under section 263 for the year of the claim.
- Letting a certificate lapse. If the certificate specifies a reassessment period, the deduction stops after the year of expiry unless you furnish a new one.
- Forgetting to net off insurance for section 128. Amounts received from an insurer or reimbursed by an employer reduce the deduction.
- Ignoring the tax cost of the scheme route. If the dependant dies before you, section 127(4) brings the deposits back into your income.
Where is this in the Act?
- Section 127: maintenance and medical treatment of a dependant with disability (limits, scheme conditions, certificate, definitions)
- Section 128: medical treatment of prescribed diseases (limit, prescription, insurance offset)
- Section 154: deduction in case of a person with disability
- Section 122(2): overall cap at gross total income; section 202(2)(a)(xii) and 202(4): regime and opt-out
- Section 2(100): senior citizen; section 263: return of income
- Rule 61: medical authority and certificate forms; rule 62: diseases and prescribing specialists
Related: health insurance premium deduction under the 2025 Act.
How do CA firms keep track of certificates and expiry dates?
For a CA firm, the risk is rarely the arithmetic. It is knowing which clients opted out of the default regime, whose disability certificate expires this year, and whose prescription is still missing when the return is due. Finexo's practice management software can hold these as client tasks and reminders. It does not compute the deduction or file the return for you.
This article explains the Income Tax Act 2025 (as amended by the Finance Act, 2026) and the Income-tax Rules, 2026. It is general information, not tax advice. Confirm the position for a specific case with a qualified chartered accountant.
Frequently Asked Questions
How much deduction can I claim for a dependant with disability?
Up to Rs 75,000 under section 127(1), or Rs 1,25,000 if the dependant has severe disability (80% or more of one or more disabilities) under section 127(3). A resident individual or HUF can claim it.
What is the limit for medical treatment of specified diseases?
Under section 128(1), the lower of the amount actually paid in the tax year or Rs 40,000. If the person treated is a senior citizen, the limit is Rs 1,00,000 under section 128(4). The amount is reduced by any insurance or employer reimbursement.
Can I claim these deductions under the default tax regime?
No. Section 202(2)(a)(xii) keeps only sections 124(1), 124(2), 125(2) and 146 from Chapter VIII in the default regime. To claim sections 127, 128 or 154 you must opt out under section 202(4).
Which doctor can certify a disability for these deductions?
For autism, cerebral palsy and multiple disabilities, rule 61(1) names a Neurologist with an MD in Neurology (a Paediatric Neurologist for children) or a Civil Surgeon or Chief Medical Officer in a Government hospital. The certificate is in Form No. 30. Other disabilities use the form in the notifications cited in rule 61(2)(b).
Can a person with disability and the person supporting them both claim?
No. Section 127(8) says a dependant who has claimed the section 154 deduction in his or her own total income cannot be treated as a dependant for section 127.
What happens if the disability certificate expires?
If the certificate specifies a reassessment period, the deduction under sections 127 and 154 is not allowed for any tax year after the year in which it expires, unless a new certificate is obtained and filed with the return (sections 127(7), 154(2)(b)).
Is there a minimum disability percentage for the deduction?
Section 127(9)(f) defines a person with disability by reference to the Persons with Disabilities Act, 1995 and the National Trust Act, 1999, so the percentage test comes from those Acts, not from the text of section 127 itself. Only severe disability (80% or more, section 127(9)(g)) is stated as a figure. Check the certificate with your chartered accountant.