What is Section 80U?

For individual taxpayers in India who suffer from a disability, Section 80U of the Income Tax Act includes tax deduction provisions. Such taxpayers can claim deduction under Section 80U by presenting a certification from an appropriate medical authority.

An MD (Neurology), Civil Surgeon, Pediatric neurologist or a CMO at a government hospital can provide an individual with authentic certification of disability.

Let us take a look at the terms and conditions applicable to those who seek benefits of Section 80U.

Deduction applicable under Section 80U- Terms & Conditions

The following terms and conditions are applicable to the assessee wanting to avail income tax deduction under Section 80U:

  • The exemption is limited to INR 75,000 per year on the interest income for a person with a 40% disability.

  • The exemption is limited to INR 1.25 Lacs per year for a person with an 80% disability (also called severe disability).

  • Deductions can be claimed by individuals suffering from disabilities and severe disabilities (also known as PwD, or Person with a Disability by Protection of Rights, Full Participation and Equal Opportunities Act, 1995).

Eligibility for Claiming Deductions under Section 80U

According to the Income Tax Act, deductions under Section 80U can be claimed by:

  • Person with Disability

  • Indian Residents

  • NRI Person with Disability can avail deduction under Section 80U

  • PwD falling under one or more of the following categories:

    • Low Vision: Visual impairment resulting in low eyesight and which can not be cured through surgery. The person requires the assistance of external devices.

    • Blindness: The complete absence of eyesight or a limited vision by 20 degrees. Visual acuity less than 6160 even after the use of the corrective lens.

    • Cured Leprosy: Individuals who have been cured of leprosy but their sensation loss in limbs persists and/or with paresis in eyes.

    • Senior citizens or individuals with an extreme deformity that limits them from being employed in an occupation.

    • Loco Motor Disability: People with disabilities of joints or muscles resulting in limited movement of limbs.

    • Hearing Impairment: Loss of auditory sense to at least 60 decibels

    • Mental Retardation: An arrested development of mental abilities leading to subnormal intelligence levels.

    • Mental Illness: Mental disorders apart from retardation are categorized under mental illnesses.

  • PwD falling under one or both of the following severe disability categories:

    • Autism

    • Cerebral Palsy

Requirements to claim tax deduction under Section 80U

  • Medical certification of the disability by a medical authority, and Form 10-IA for severe disability as per section 139 of the Income Tax Act.

  • If the disability assessment certificate is expired, one can claim tax deductions without hassle in the same financial year. Although, the PwD will require a fresh certificate from the subsequent year to claim tax deduction under Section 80U.

Key differences between Section 80U and Section 80DD

There are major differences that can be noticed under the provision of Section 80DD and Section 80U. The following are the key distinctions.

Sr. no

Section 80U

Section 80DD

1

Availed by the Person with Disability, themselves

Availed by the family members of the Person with Disability

 

 

*Also applicable to a family member of the dependant PwD who has deposited amount as insurance premium

Conclusion

Section 80U has supported individuals with disabilities and severe disabilities by lowering financial burdens. Section 80U of the Income Tax Act can prove to be a great source of financial relief to such taxpayers. Ensure that you make good use of the deductions available under Section 80U and to lower your tax burden even further, invest in ULIPs on Finserv MARKETS.

FAQs

  • ✔️To claim tax deduction under Section 80U, which documents are required?

    To claim tax deduction under Section 80U of the Income Tax Act, the Person with Disability must present a certificate from a medical authority acknowledging the disability, a separate form for mental illnesses, and form 10-IA for severe disabilities like autism and cerebral palsy.
  • ✔️What does the amount of tax deduction under Section 80U depend upon?

    The tax amount deducted under Section 80U is a lump sum deduction, irrespective of your medical expenses or bills.
  • ✔️How can I avail of additional tax deductions if I have exhausted my deduction limit under Section 80U?

    If you have exhausted your deduction limit under Section 80U, you can always invest in other financial instruments that provide deductions. For instance, ULIPs (Unit Linked Insurance Plans) can provide you with a number of deductions and exemptions to help lower your income tax. ULIPs fall under the coveted Exempt-Exempt-Exempt status i.e. everything from your principal investment amount to the income earned and the maturity proceeds received are eligible for deductions and exemptions. You can invest in Bajaj Allianz ULIPs on Finserv MARKETS and take your pick from three different plans - Child ULIPs, Retirement ULIPs and Investment ULIPs.

Happy Customers of Finserv MARKETS

Getting a loan to take care of my wedding and relieving my parents to enjoy the occasion was the best decision I ever made. Easy-to-apply, amazing interest rate and quick disbursal, what more can one ask for!

I am passionate about the vehicle I drive and hence I wan't to protect it with the best available option. What amazed me about Bajaj Finserv Markets was full transparency, quick quotes and the attractive discount on the premium while choosing annual payment option!

Check your personal loan eligibility in seconds!

My husband and I will finally move into our own house this Diwali. All thanks to Bajaj Finserv – Markets, with competitive interest rates, minimal processing fees and easy to repay EMIs, our dream saw the light of reality in no time!

Get the best FD interest rates starting @ 8.40%. Let's start!

Kids grow up fast and to fulfill their dream trip to Disneyland I had everything but instant funds. With no collateral or guarantor required and a hassle-free processing, I gifted my family a memorable trip to Paris just at the click of a mouse!

Get sum insured up to 1 Crore! Let's start!

The best way to start looking for health insurance is not a 60 minute meeting with an insurance sales person but with a close study of my coverage needs and checking the insurance company's claim ratio. No unnecessary jargons, easy to apply claims process and choice of premiums, what else could I have asked for as a newbie!

Zero additional charge on part-payment option on Business loans! Let's start!

I bought my first iPhone using my Bajaj Finserv EMI Network Card. Zero downpayment, No cost EMI on Bajaj Finserv Markets EMI store and the smile on my dad's face just made my day!

Get home loan sanctioned online in 72 hours! Let's start!