The government continuously tries to make life easier for specially-abled people by creating special schemes and programmes dedicated to them. The ITD also has special provisions under Chapter VI-A to help them financially by providing deductions in respect of medical expenditures or upon completion of certain conditions. One such deduction is provided under Section 80U for individuals with certain disabilities.
What is Section 80U?
Section 80U of the Income Tax Act 1961 is a crucial incentive to help disabled individuals manage their financial well-being. Resident individuals who are physically or mentally impaired are eligible for 80U benefits. This income tax deduction can be claimed at the time of filing ITR under Chapter VI-A.
Which disabilities fall under Section 80U deduction?
An individual suffering from any of the following disabilities is eligible to claim a deduction under section 80U of the Income Tax Act:
- Cerebral palsy
- Low vision
- Leprosy cured
- Hearing impairment
- Locomotor disability
- Mental retardation
- Mental illness
What are the Conditions to Claim 80U Deduction?
- The taxpayer must be a resident Indian.
- The taxpayer should be suffering from at least 40% disability.
- An individual should be independent.
- Taxpayers should have a copy of the certificate issued by medical authorities certifying the ‘person with a disability’.
Unlike section 80DD, which provides a deduction in respect of the dependent disabled, this section provides a flat deduction based on the severity of the disability. Hence, the amount of expenses incurred is irrelevant for claiming a deduction under section 80U.
Which Medical Authority is eligible to issue the certificate?
Below are the medical authorities who are eligible to issue a disability certificate:
- A neurologist with an MD in Neurology
- Pediatric Neurologist in case of disabled children
- A civil surgeon or Cheif Medical Officer in a government hospital
What is the Deduction Limit u/s 80U?
Individuals with a disability are categorized into two parts:
- Disabled Individual: An individual suffering from at least 40% of disability.
- Severely Disabled Individual: An individual suffering from at least 80% of disability.
Tax deduction under section 80U is as follows:
|Disabled Individual||INR 75,000|
|Severely Disabled Individual||INR 1,25,000|
Note: If the taxpayer opts for the new tax regime, a deduction under section 80U is not allowed.
Example of 80U deduction
Ankit is an individual who is suffering from hearing impairment. He is suffering from a 40% disability. During FY 2021-22, he earned a salary of INR 5,20,000. Further, he has obtained a certificate from the medical authority for his disability.
In the above case, Ankit can claim a deduction of INR 75,000. He can claim this deduction under chapter VI-A while filing his ITR.
ITR Form Applicable for Section 80U
The taxpayer can claim deductions u/s 80U while filing ITR if all the above-mentioned conditions are fulfilled. Individuals can claim the deduction in any of the ITR forms, i.e, ITR 1, ITR 2, ITR 3, and ITR 4 depending upon their income sources.
- Form 10-IA i.e. Certificate of Medical Authority. This form can be found on Income Tax Website.
The certificate of disability that is provided by the Medical Authority has an expiry date. If the validity of the certificate expires within a financial year, deductions can be claimed by showing the expired certificate. However, one will need a new certificate to claim deductions for the next financial year.
No, it is not necessary to incur any expenses to claim a deduction, only a certificate in Form 10IA from medical authorities stating the disability is required.
The format of the certificate in Form 10IA is available on the Income Tax Website. It needs to be authorised by the prescribed medical authorities only.
No, deductions under section 80U are available only to resident individuals.
Both sections 80U and 80DD are related to providing deductions to taxpayers with disability. However, the beneficiaries under each section are different. Section 80U provides a deduction for an independent taxpayer who is disabled himself while section 80DD allows a deduction if the taxpayer has family members who are dependent and suffering from a disability.
Yes, provided that 80U is claimed for self and 80DD is claimed for a dependent who is disabled, a taxpayer may claim both deductions at once.