As per Section 80DD of Income Tax Act Provides Deduction in respect of maintenance including medical treatment of a dependent who is a person with disability.
As per the Act dependent includes spouse, son or daughter (or any child), parents as well as brother or sister i.e. any siblings can be considered as your disabled dependent. But the condition is that the person should be wholly or mostly dependent on you for his/her support and maintenance.
Eligible Expenditure are Any expenses incurred for medical treatment which includes nursing, training as well as rehabilitation of dependent that is disabled. The amount paid towards Life Insurance Corporation (LIC), Unit Trust of India or any of the other insurers for the sole purpose of buying specified schemes or insurance policies to help in the maintenance of a dependent with disabilities.
Blindness is included as disability for section 80DD
So in your case -
A - "if his sister is married and living with her husband." - She is not directly dependent on you, so you can't take the deduction.
B - "if his sister was married and now divorced" - In this case if she is not earning then she is dependent on you. You can claim the deduction.
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