Section 80U: Income Tax Deductions for Disabled Individuals
Updated: 2 days ago
India’s tax system recognizes the challenges faced by individuals with disabilities and offers provisions to reduce their financial burden. Section 80U of the Income Tax Act is one such benefit, designed to provide fixed deductions to individuals with certified disabilities, reducing their taxable income significantly.
This article explains every aspect of Section 80U, including its eligibility, deduction limits, covered disabilities, how to claim, and its availability under the New Tax Regime. We also clarify the differences between Section 80U and related provisions like Section 80DD and Section 80DDB.
Table of Content
What is Section 80U? Tax Deduction Under Section 80U Who Can Claim Deduction Under Section 80U? Deduction Limit Under Section 80U Which Disabilities Are Covered Under Section 80U?
What is Section 80U?
Section 80U is a provision under the Income Tax Act that allows fixed deductions to resident individuals with certified disabilities. These deductions are not linked to actual expenses incurred and are instead based on the severity of the disability. This section is intended to support individuals with disabilities (referred to as divyangjan) by offering tax relief, enabling them to manage their financial obligations better.
Tax Deduction Under Section 80U
The tax deduction under Section 80U depends on the severity of the disability. It provides:
₹75,000 for individuals with disabilities (40%-79%).
₹1,25,000 for individuals with severe disabilities (80% or more).
This deduction is a fixed amount directly subtracted from the gross total income, reducing the taxable income significantly.
Who Can Claim Deduction Under Section 80U?
To claim deductions under Section 80U, an individual must meet these criteria:
Resident Individual
The deduction is available only to resident individuals under the Income Tax Act.
Non-Resident Indians (NRIs) are not eligible.
Disability Certification
The individual must possess a valid disability certificate issued by a recognized medical authority in the prescribed format (Form 10-IA).
Disability Percentage
A disability percentage of 40% or more is required to claim the deduction.
Severe disabilities (80% or more) qualify for a higher deduction.
Deduction Limit Under Section 80U
The deduction limits under Section 80U are as follows:
₹75,000 for disabilities between 40% and 79%.
₹1,25,000 for severe disabilities (80% or more).
Example
If an individual has an annual income of ₹10,00,000 and a certified disability of 70%:
Particulars | Without 80U Deduction | With 80U Deduction |
Gross Income | ₹10,00,000 | ₹10,00,000 |
Deduction Under Section 80U | ₹0 | ₹75,000 |
Taxable Income | ₹10,00,000 | ₹9,25,000 |
Tax Payable (Post-Rebates) | ₹1,12,500 | ₹97,500 |
Savings: ₹15,000 in tax liability.
Which Disabilities Are Covered Under Section 80U?
Section 80U recognizes a wide range of disabilities, including:
Locomotor Disability: Impairment in joints or muscles causing restricted limb movement.
Blindness and Low Vision: Visual impairments that cannot be fully corrected by surgery or lenses.
Hearing Impairment: Hearing loss of 60 decibels or more.
Mental Retardation: Reduced intellectual functioning caused by arrested or incomplete mental development.
Mental Illness: Severe psychiatric disorders or other diagnosed mental conditions.
Autism and Cerebral Palsy: Neurological disorders impacting behavior, movement, or communication.
Leprosy-Cured Individuals: Physical deformities caused after recovery from leprosy.
Multiple Disabilities: Combinations of the above-listed conditions.
How to Claim a Deduction Under Section 80U?
Follow these steps to claim the deduction under Section 80U:
Obtain a Disability Certificate
Issued by a certified medical authority, such as a civil surgeon, neurologist, or chief medical officer (CMO).
The format of the certificate must comply with Form 10-IA.
Monitor Certificate Validity
Ensure the certificate is valid during the financial year of claim.
Expired certificates can be used for claims in the year of expiration but require renewal for subsequent years.
File Income Tax Returns (ITR)
While filing your ITR, mention the deduction under Section 80U in the appropriate section.
Retain the disability certificate for verification purposes but do not attach it to the ITR.
Requirements to Claim Deductions Under Section 80U
If you’re claiming deductions under Section 80U for disability, here’s what you need to know:
Minimal Documentation: You only need a medical certificate (Form 10-IA) from a recognized medical authority certifying the disability. There’s no need to submit bills or proof of treatment expenses.
Filing Requirements: Attach the medical certificate with your income tax return for the relevant assessment year as per Section 139. If your disability certificate expires during a financial year, you can still claim the deduction for that year. However, a new certificate will be required for subsequent years.
Medical Authorities: The certificate must be issued by:
A neurologist with an MD in Neurology (or a pediatric neurologist for children).
A civil surgeon or Chief Medical Officer at a government hospital.
Old Tax Regime: This deduction is available only if you opt for the old tax regime.
Certificate Validity: For temporary disabilities, the certificate is valid from the assessment year related to the financial year it was issued and remains valid until the assessment year when it expires. After this, a new certificate is needed.
Make sure you keep your documentation updated to avoid any issues when claiming deductions.
Which Medical Authority Can Issue Certificates Under Section 80U?
The following professionals are authorized to issue disability certificates:
Neurologists with an MD in Neurology.
Pediatric Neurologists for children with disabilities.
Chief Medical Officers (CMOs) or Civil Surgeons from government hospitals.
The certificate should clearly state the percentage of disability and its validity.
Difference Between Section 80U and Section 80DD
Feature | Section 80U | Section 80DD |
Who Can Claim? | The individual with the disability. | The taxpayer who incurs expenses for a dependent with a disability. |
Dependent Coverage | Not applicable. | Covers dependents such as spouse, children, parents, or siblings. |
Deduction Type | Fixed deduction based on disability percentage. | Deduction for actual expenses on medical care or rehabilitation. |
Documents Required | Disability certificate. | Disability certificate and proof of expenses. |
Deduction Limit | ₹75,000 or ₹1,25,000 (based on severity). | ₹75,000 or ₹1,25,000 (based on severity). |
Purpose | Relief for the taxpayer with a disability. | Relief for expenses incurred on a dependent’s disability. |
80U Under the New Tax Regime
Under the New Tax Regime, introduced in FY 2020-21, deductions under Section 80U are not available. The regime provides lower tax rates but eliminates most deductions, including 80U.
Example:
Under the Old Tax Regime, a taxpayer with a 70% disability earning ₹10,00,000 annually can claim ₹75,000 under Section 80U, reducing taxable income to ₹9,25,000.
In the New Tax Regime, the full income of ₹10,00,000 will be taxable.
Taxpayers must weigh the benefits of deductions against the lower tax rates of the New Tax Regime.
FAQ
Q1. What is Section 80U?
Section 80U provides fixed tax deductions for individuals with certified disabilities.
Q2. What is the maximum deduction under Section 80U?₹
1,25,000 for severe disabilities (80% or more).
Q3. Can NRIs claim deductions under Section 80U?
No, only resident individuals are eligible.
Q4. What is Form 10-IA?
A form used to certify disabilities for tax deductions.
Q5. Is 80U available under the New Tax Regime?
No, deductions under 80U are not applicable under the New Tax Regime.
Q6. Can I claim both 80U and 80DD?
No, they cannot be claimed simultaneously for the same individual or expenses.
Q7. What is a divyang certificate?
It is a government-issued certificate verifying an individual’s disability.
Q8. Can the deduction be claimed for expenses?
No, 80U deductions are fixed and not dependent on expenses.
Q9. Where can I download the disability certificate?
Disability certificates are issued by recognized government medical institutions.
Q10. What types of disabilities are eligible under Section 80U?
Disabilities such as locomotor disability, blindness, hearing impairment, autism, cerebral palsy, mental retardation, and leprosy-cured conditions are eligible under Section 80U, provided they meet the required percentage.
Q1 1 .What is the severe disability deduction limit under Section 80U?
Individuals with severe disabilities (80% or more) can claim a deduction of ₹1,25,000.
Q12. Can I claim a Section 80U deduction if I also receive a pension due to my disability?
Yes, Section 80U deductions can be claimed even if you receive a pension. The deduction applies directly to taxable income.
Q13. Is medical treatment required to claim a deduction under Section 80U?
No, the deduction is based on the percentage of disability, not the treatment received. A valid disability certificate is sufficient.
Q14. How often should I renew my disability certificate for Section 80U?
Certificates have specific validity periods. You must renew them when they expire to claim deductions in subsequent years.
Q15. Can Section 80U deductions be claimed for temporary disabilities?
No, only permanent disabilities certified by recognized authorities are eligible under Section 80U.
Q16. Are mental health conditions covered under Section 80U?
Yes, conditions like mental illness, autism spectrum disorders, and cerebral palsy are covered, provided they meet the required disability percentage.
Q17. Can multiple deductions (80C to 80U) be claimed simultaneously?
Yes, you can claim deductions under other sections like 80C, 80D, etc., along with Section 80U. However, Section 80DD cannot be claimed for the same disability.
Q18. What is the difference between 30% disability benefits and Section 80U?
In India, certain schemes provide benefits starting at 30% disability. However, Section 80U requires a minimum of 40% disability for tax deductions.
Q19. What documents do I need to retain while filing for 80U deductions?
Retain a copy of the disability certificate and Form 10-IA (if applicable). Medical expense receipts are not required.
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