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Section 80U: Deduction for Individuals with Disability

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Hiral Vakil

Chapter VI-A
Indian Resident
Section 80U
Last updated on April 16th, 2021

Deduction under setion 80U can be claimed by a Resident Individual with a disability. HUF cannot claim deduction u/s 80U if any of its members are suffering from a disability. This income tax deduction can be claimed at the time of filing ITR under Chapter VI-A.

Deduction under section 80U is not allowed for Financial Year 2020-21 if the taxpayer opts for the new tax regime
Tip
Deduction under section 80U is not allowed for Financial Year 2020-21 if the taxpayer opts for the new tax regime

Who is Eligible to Claim Deduction u/s 80U?

An individual suffering from any of the following disabilities is eligible to claim deduction u/s 80U:

One has to note that an individual will be considered disabled if he/she is suffering from a disability which is 40% or more but less than 80%. If a taxpayer is suffering from more than 80% disability then it will be termed as Severe Disability and the deductions will vary based on the severity of the disability.

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What are the Conditions to Claim Deduction u/s 80U?

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Residential Status Calculator for Income Tax. Taxability in India depends on residential status. Know your residential status from Resident, NRI, Resident but Not Ordinarily Resident(RNOR)
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Who is Considered as a Medical Authority?

Below mentioned are the medial authorities who are eligible to issue a disability certificate:

How is the Deduction Calculated Under Section 80U?

Let us take an example in-order to understand the calculations better;

Ankit is an individual who is suffering from hearing impairment. He is suffering from a 40% disability. During FY 2018-19, he has earned a salary of INR 5,20,000. And he has obtained a certificate from the medical authority for his disability.

Solution

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.

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What is the Deduction Limit u/s 80U?

For FY 2018-19 deduction limit u/s 80U is as follows, a person with a disability is categorized into two parts:

Category Deduction Amount
Disabled Person INR 75,000
Severely Disabled Person INR 1,25,000

ITR Form Applicable for Section 80U

The taxpayer can claim deductions u/s 80U while filing ITR if all the above-mentioned conditions are full-filled. Individuals/HUFs can claim 80U in any of the ITR forms, i.e, ITR 1ITR 2ITR 3, and ITR 4 depending upon their income sources. The due date for filing ITR is 31st July of the next FY if the tax audit is not applicable.

For FY 2019-20, due to COVID-19 the due date for filing ITR has been extended to 10th January 2021 for all taxpayer.
Tip
For FY 2019-20, due to COVID-19 the due date for filing ITR has been extended to 10th January 2021 for all taxpayer.

Supporting Documents

Along with the common documents such as Form 16, you only require the disability certificate issued by a medical authority to claim this deduction. However, in the case of illness such as autism and cerebral palsy, Form 10-IA additionally needs to be filled up.

FAQs

How to get certificate for claiming deduction u/s 80U?

Income Tax Rule 11A has prescribed the format of a certificate for claiming a deduction. You can download the certificate format from the Income Tax Department. You need to get this certificate from medical authorities. Any doctor who is notified by the central government to certify the disabilities can issue this certificate.

Do I have to incur expenses on treatment of disability, to claim deduction under 80U?

No. It is not necessary to incur any expenses to claim a deduction. You only have to obtain a certificate from medical authorities about your disability.

What are the documents required to claim deduction u/s 80U?

You should keep the certificate by the medical authority for your disability. Moreover for an illness like autism or cerebral palsy file Form 10-IA with IT Department.

Can an NRI claim deduction under section 80U?

No, deductions under section 80U are available only to residential individuals.

What is the difference between 80U and 80DD?

Both section 80U and 80DD are related to providing deductions to taxpayers with disability. However, the beneficiaries under each section are different. U/S 80U, it is the individual who is disabled can claim a deduction for oneself whereas u/s 80DD family members who are dependent on the individual who is suffering from disability can claim the deduction.

Can I claim deduction under section 80U and 80DD simultaniously?

No, a taxpayer cannot claim deduction under both the sections at the same time. If he/she is claiming a deduction u/s 80U then he cannot claim deduction u/s 80DD and vice a versa.

Do I have to submit medical reports and/or bills inorder to claim a deduction u/s 80U?

No, in order to claim deduction one does not need to submit medical reports or bills. However, a medical certificate is required to be submitted.

Got Questions? Ask Away!

  1. Hey @sushil_verma

    There are a wide range of deductions that you can claim. Apart from Section 80C tax deductions, you could claim deductions up to INR 25,000 (INR 50,000 for Senior Citizens) buying Mediclaim u/s 80D. You can claim a deduction of INR 50,000 on home loan interest under Section 80EE.

  2. Hey @Dia_malhotra , there are many deductions that you can avail of. Your salary package may include different allowances like House Rent Allowance (HRA), conveyance, transport allowance, medical reimbursement, etc. Additionally, some of these allowances are exempt up to a certain limit under section 10 of the Income Tax Act.

    For eg,

    • Medical allowance is exempt up to INR 15,000 on a reimbursement basis.
    • Children education allowance is exempt up to Rs. 200 per child per month up to a maximum of two children.
    • Conveyance allowance is exempt up to a maximum of Rs. 1600 per month.

    Tax on employment and entertainment allowance will also be allowed as a deduction from the salary income. Employment tax is deducted from your salary by your employer and then it is deposited to the state government.

  3. The benefit Section 80EEB can be claimed by individuals only. An individual taxpayer can claim interest on loan of an electric vehicle of up to INR 1.5 lacs u/s 80EEB. However, if the electric vehicle is used for the purpose of business, the vehicle should be reported as an asset, loan should be reported as a liability and the interest on loan can be claimed as a business expense irrespective of the amount. (We have updated the article with the changes).

    Thus, if you have a proprietorship business, you should claim interest amount as a business expense only if the vehicle is used for business purpose. However, if it is used for personal purpose, you can claim deduction of interest u/s 80EEB in your ITR since you would be reporting both personal and business income in the ITR (under your PAN).

    As per the Income Tax Act, the deduction under Section 80EEB is applicable from 1st April 2020 i.e. FY 2020-21.

  4. Hey @Sharath_thomas , we have updated the content according to the appropriate assessment year. Thanks for the feedback. :slight_smile:

  5. Hey @shindeonkar95

    In case of capital gain income (LTCG/STCG), transfer expenses are allowed as deduction, except STT.

    However, in case of business income (F&O, intraday), all expenses incurred for the business (including STT) are eligible to claim deduction in ITR.

    Hope, it helps!

  6. Hello,

    Is it possible to claim deductions under S. 80CCF for Infra bonds bought in the secondary market and held to maturity?

    There were a number of 10 year infra bonds issued in the 2010- 2013 period, which will start maturing soon. These are all listed on the exchanges (although hardly any liquidity or transactions in them). If I were to buy some of these bonds in the open markets and hold them in my demat to maturity (<3 years), is it possible to claim tax deductions (upto 20k per year) under 80CCF for buying?

    I couldn’t find anything on this. Any help is appreciated.

  7. Hello @Veejayy,

    Yes you can claim deduction under 80CCF for investment made in specified infrastructure and other tax saving bonds bought in the secondary market and held to maturity.

    Deduction under Section 80CCF can be availed only through investment in certain tax saving bonds, issued by banks or corporations after gaining permission from the government which shall be restricted upto 10,000 per year.

    These bonds are generally long term bonds, having tenure of more than 5 years with a lock in period of 5 years in most of the cases. These bonds can be sold after the lock in period!

    Also, interest earned on these bonds will be taxable.

    Hope this helps!

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