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Several eligible deductions have been prescribed under Chapter VIA by the Income Tax Act, 1961. These deductions help in mitigating the tax liabilities or burdens. One of the many deductions under this act is provided under section 80U of the IT Act. Since they are free of tax in nature, they are lessened from your gross total income. If you (the tax-payer) are disabled, you are eligible for tax deduction u/s 80U. Read on to know more about this section and its various dimensions.

What is Section 80U of the Income Tax Act, 1961

Section 80U of the Income Tax Act, 1961, offers a flat tax deduction to an individual who is disabled. The deduction is provided based on the severity of disability, irrespective of the expenditure amount. The conditions that one must fulfil to be able to claim the deductions under section 80U are as follows:

 

  • The tax-payer must be a resident of India and an individual.

  • He/she must be suffering from a disability of at least 40%.

  • The disability should have been certified by the medical authorities which have been recognised by the government of India. 

Definition u/s 80U of the Income Tax Act

Disability

An individual who is a resident of India certified with a disability by a recognised medical authority is eligible to claim the tax benefits under section 80U of the Income Tax Act, 1961. As per the Persons with Disability (Protection of rights, full participation, and equal opportunities) Act of 1955, an individual with at least 40% disability as certified by a recognised medical authority is considered to be disabled. 

 

This section also provides a definition of ‘severe disability’. This is a condition wherein the disability is at least 80%. It also comprises autism, cerebral palsy, and multiple disabilities. Individuals with an impairment of 40% or more in the following diseases are considered to be disabled:

 

  • Low vision - This refers to resident individuals with an impaired eyesight which cannot be surgically treated and can utilise their vision with the help of several equipment.  

  • Hearing impairment - This is the case wherein the resident individual experiences a loss of hearing power of 60 decibels or more.

  • Mental illness - Several mental illnesses are not related to mental retardation.

  • Blindness - This is defined as a total vision loss with a field of restriction of vision of at least 20-degrees.   

  • Leprosy-cured - Patients diagnosed with leprosy and have been cured but still have paresis in their hands, eyelids, foot, and other extremities. In addition to this, this prevents the elderly or others with severe disabilities from doing any useful work. 

  • Locomotor disability - Resident individuals whose bones, muscles, or joints limit their motion significantly.

Tax Deduction Under Section 80U of the IT Act

Here’s a table that indicates the amount of deduction permitted to individuals with different disabilities:

Category

Deduction Permitted 

Disabled resident individual with 40% disability

Rs. 75,000

Severely disabled resident individual with 80% disability

Rs. 1,25,000

This deduction limit under Section 80U has been changed from the prior limit of Rs. 1,00,000 for severe disability and Rs. 50,000 for disability. These modifications were brought into effect in FY 2015-16. If you wish to register for the claim under this section, you must present the required medical certificate issued from a recognised authority. This should indicate your disability in addition to the income return certificate as per the Section 139 for the given assessment year.

 

If the certificate of your disability assessment has expired, you can still claim the tax deduction in the expiry year if you present it to the required authorities. However, to be eligible for tax deductions from the subsequent years, you will have to submit a fresh disability assessment certificate. These certificates can be procured from the medical authorities recognised by the government of India.

Difference Between Sections 80DD and 80U of the Income Tax Act

Section 80DD of the IT Act, 1961, provides deductions on tax to the members of the family who are disabled. On the other hand, Section 80U allows deductions for a resident individual with a disability. The former is also valid if the resident individual deposits a particular sum as the insurance premium in order to take care of disabled person who is dependent on them. 

 

The limitations for the deductions under Section 80DD are same as those under Section 80U of the IT Act, 1961. Dependent on the above-mentioned case entails the individual’s sibling, children, parents, spouse, or any member of the Hindu Undivided Family (HUF).

 

Hence, if you are someone with a disability, you can use the deductions under Section 80U of the IT Act while filing your returns on your income tax. You can utilise the limitations under Section 80U in order to mitigate your tax liability and hence, your taxable income.

How to Claim Deduction under Section 80D

You are not required to submit any document other than a certificate proving your disability from a medical authority which has been recognised by the government of India in order to claim deductions under Section 80D of the Income Act, 1961.

 

There is no requirement of producing bills incurred as a result of treatment expenses. However, you are needed to fill up several forms in case you are diagnosed with mental illnesses and a few other disabilities. Similarly, for autism and cerebral palsy, you are required to fill form 10-IA. 

 

If you wish to file the claim, you are required to submit the medical certificate indicating your disability and your income return certificate according to Section 139 of the given assessment year. Even if your disability assessment certificate expires, you will be able to claim the tax deductions in the expiry year. 

 

However, in order to claim the tax benefits under this section from the subsequent year onwards, you must present a fresh medical certificate. You can obtain the required certificates from medical authorities which can comprise an MD in neurology, Chief Medical Office, Civil Surgeon at a government hospital, a paediatrician, or a urologist.

Conclusion

If you are a resident individual with a disability, you must claim a tax deduction under Section 80U of the Income Tax Act, 1961. This will help you mitigate your tax liability and taxable income tax. However, you will be eligible for this deduction only if you have at least 40% of disability according to the recognised medical authorities.

Frequently Asked Questions

  • ✔️What are the diseases considered for tax deductions under section 80?

    Diseases like low vision, blindness, leprosy-cured, locomotor disability, mental illness, and hearing impairment are considered under this section.

  • ✔️What is the deduction amount u/s 80U of the Income Tax Act, 1961?

    The deduction amount permitted to a disabled individual with at least 40% disability is Rs. 75,000. On the other hand, the amount of tax deduction permitted to a severely disabled resident individual with at least 80% disability is Rs. 1,25,000.

  • ✔️Can the deductions under sections 80DD and 80U be claimed simultaneously?

    No, the tax deductions under sections 80U and 80DD of the IT Act, 1961, cannot be claimed simultaneously.

  • ✔️What are the documents required to be submitted to claim the tax deductions under section 80U?

    Only the medical certificate authorising your disability from a recognised medical institution is required to be submitted for you to be able to claim the tax deductions under this section. 

  • ✔️When did the new deduction limits under section 80U come into force?

    The new deduction limits came into effect in the financial year 2015-16.