Section 80U - Tax Deduction for Disabled Individuals

Certain sections under the income tax laws of India which provide tax benefits to individuals if either they or any of their family members are suffering from certain disabilities. 

Section 80U offers tax benefits if an individual suffers a disability, while Section 80DD offers tax benefits if an individual taxpayer’s dependent family member(s) suffers from a disability. This article is centered around discussing various aspects of Section 80U including the following:

• Eligibility to claim deduction under section 80U
• Quantum of Deduction under 80U
• Requirements to claim deductions under 80U
• Medical Authorities eligible to issue certificate
• Differences between 80U and 80DD 

Who Can Claim Deduction Under Section 80U?

A resident individual who has been certified as a person with a disability by the medical authority can claim the tax benefit under Section 80U. For the purpose of this section, a person with a disability is defined as a person who has at least 40% disability, certified by the medical authorities.

For the purpose of this section, disability has been defined as one of the following:

• Blindness
• Low vision
• Leprosy-cured
• Hearing impairment
• Loco motor disability
• Mental retardation
• Mental illness

The section also provides a definition for a severe disability which refers to a condition where the disability is 80 percent or more. Severe disability also includes multiple disabilities, autism and cerebral palsy.

Quantum of Deduction Under 80U

A flat deduction of Rs.75,000 is allowed for people with disabilities and a Rs.1,25,000 flat deduction for people with severe disability.

Requirements to Claim Deductions Under Section 80U

There isn’t any documentation requirement apart from the certificate certifying the disability from a recognized medical authority in Form 10-IA. There’s no need of producing bills for the cost incurred for the pursuance of treatment or such other expenses.

For making a claim under this section, one must submit the medical certificate indicating the disability together with the income tax returns as per Section 139 for the relevant AY. In case the disability assessment certificate has expired, one would still be able to claim such deductions in the year in which the certificate expires. However, a fresh certificate would be required from the succeeding year to claim the benefits u/s 80U.

Certificates could be obtained from the medical authorities, who could be either a neurologist with a Doctor of Medicine (MD) in Neurology (in the case of children, a pediatric neurologist with an equivalent degree) or a civil surgeon or Chief Medical Officer in a government hospital.

This deduction can be claimed only if you are opting for the old tax regime.

Note: If the disability is temporary and requires reassessment after a certain period, then the certificate’s validity starts from the assessment year relevant to the financial year during which it was issued and ends during the assessment year relevant to the financial year when the certificate expires.

Which Medical Authority can Issue Certificates Under Section 80U?

Medical authorities who are eligible for issuing a disability certificate can be any of the following:

• A neurologist who has a degree of MD (Doctor of Medicine) in Neurology
• A civil surgeon in a government hospital
• A Chief Medical Officer in a government hospital
• A pediatric neurologist who has a degree of MD (Doctor of Medicine) in Neurology in case of disabled children

Difference Between Section 80U and Section 80DD

Section 80DD provides tax deductions to the family members and the kin of the taxpayer with a disability, whereas Section 80U provides deductions to the individual taxpayer with a disability himself.

Section 80DD is applicable if a taxpayer deposits a specified amount as an insurance premium for taking care of his/her dependent disabled person. Under section 80DD, the deduction limits are the same as Section 80U. Here, a dependent refers to the siblings of the assessee, parents, spouse, children or a member of a Hindu Undivided Family.

In other words, if an individual incurs expenditure for his dependent relative & claims deduction under section 80DD, the latter will not be eligible to claim deduction under section 80U for his disability.

Deduction under Section 80U or 80DD can be claimed only if the taxpayer opts for the Old tax regime.