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Section 80U of the Income Tax Act: Tax Deduction for Disabled Individuals

In India, several sections of the Income Tax Act provide benefits to individuals having a disability. One such is Section 80U of the Income Tax Act.

In this piece, we have discussed 80U deduction, limit and various aspects of it.

Read on to know about them in detail.

Team Digit

What Is Section 80U of the Income Tax Act?

According to Section 80U of the Income Tax Act, 1961, taxpayers suffering from a disability are eligible to get tax deduction benefits. Individuals must submit a medical certificate from an authorised medical authority to avail the benefits offered under this section.

A paediatric neurologist, a Civil surgeon, an MD (Neurology), CMO at a government hospital can provide the medical Certificate required to get 80U deduction.

From the paragraph mentioned above, it is clear that residential Indian taxpayers having a disability can enjoy tax benefits under Section 80U of the Income Tax Act. Here, the question arises who is disabled as per section 80U? Read the following section, and you will get the answer.

What Is Disability as Per Section 80U of the Income Tax Act?

As per the Persons with Disability (Equal Opportunities, Protection of Rights and Full) Act, 1955, individuals who have 40% disability as a medical authority has certified are defined as disabled. The conditions or categories of disabilities are of 7 types. These are,

Minimal Vision 80U

Income Tax deductions are available for individuals who have vision impairment (incurable even by surgery) but can use their vision by taking assistance of specific devices.

Blindness

Individuals who have limited vision or lack of sight by 20 degrees of angle or visual acuity not above 6160 (after using the corrective lenses) will fall under this disability category. These persons will be able to get tax benefits.

Leprosy Cured

Individuals who have recovered from leprosy but have lost proper functioning of the eye, hand or feet can present themselves as disabled under the Persons with Disability (Equal Opportunities, Protection of Rights and Full) Act, 1955. The definition applies to those individuals, including senior individuals who have severe deformities who prevent them from taking any beneficial occupation.

Loco Motor Disability

Persons who are suffering from disability in legs or disability associated with bones, muscles and joints fall under this category.

Mental Retardation

Individuals, who have limited or incomplete mental development, fall under the disability category. These medical conditions can lead to subnormal levels of intelligence.

Mental Illness

Any kind of mental disorder other than mental retardation is considered a disability as per the Persons with Disability (Equal Opportunities, Protection of Rights and Full) Act, 1955.

Hearing Impairment

Hearing impairment is considered a disability when an individual does not have hearing power of above 60 decibels.

From the above pointers, it is easy to identify persons who are eligible to claim the 80U deduction. However, there is another category of severe disability under Section 80U. This category includes individuals having a disability of 80% or above. Individuals with multiple disabilities, cerebral palsy and autism fall under this severe disability category.

Now that individuals know the meaning of Section 80U under the Income Tax Act and the definition of disability under this section, we can move on to the documentation requirement and process of claiming deduction under Section 80U.

How to Claim Deductions Under Section 80U?

To claim an 80U deduction, individuals have to furnish a medical certificate declaring disability and other important documents while reporting income to the income tax department.

Note: If a disabled individual claims this deduction, no other family member can claim for this on his deduction under Section 80DD (discussed later).

Wondering how much deduction is available under Section 80U? Read along!

What Is the Deduction Limit Under Section 80U?

The deduction offered under Section 80U is segmented into two parts. These are for,

Persons With Disability

Individuals with 40% disability can claim ₹75,000 as 80U deductions.

Persons With Severe Disability

Individuals with 80% or one or more disability can claim ₹1,25,000 as mentioned in the Sub Section 4 of the Section 56. Severe disability also encompasses autism, mental retardation, cerebral palsy, multiple disabilities.

What Are the Documents Necessary to Claim Deductions Under Section 80U?

Following is a list of documents essential for claiming 80U deductions.

Medical certificate declaring disability from a medical authority (for general disability).
Form 10-IA for persons with severe disability (according to Section 139 of the Income Tax Act)

What Is the Difference Between Section 80DD and 80U of Income Tax?

As per Section 80DD of the Income Tax Act,1961, the family members or Next of kin of a disabled person can claim tax deduction under this section. This section applies to individuals who have deposited a specific amount as a premium of insurance to look after the disabled person.

On the other hand, disabled persons can themselves claim benefits offered under Section 80U.

Remember, the income tax rebate for physically handicapped under 80U and 80DD is the same.

Frequently Asked Questions

All

Can Non-Resident Indians claim deductions under Section 80U?

No, Non-Resident Indians claim 80U deductions.

Can an individual claim an 80U deduction after the expiry of a medical certificate?

Yes, individuals can still claim tax deductions in the financial year of the medical certificate expiry date. However, individuals have to obtain a fresh certificate from a recognised medical authority to avail Section 80U benefits from the following years.

Who are dependents of disabled persons?

Dependents of disabled persons include spouses, parents, children, siblings or anyone belonging to a Hindu Undivided Family (HUF).

What is the exemption for disabled people in income tax?

Individuals with disabilities can benefit from income tax exemptions under Section 80U. To qualify, a resident must be certified by a medical authority as having a disability of at least 40%. This tax exemption can easily be calculated using an income tax calculator, which gives an accurate amount of eligible exemptions.