1. Introduction to Section 80U
There are certain sections under the income tax laws of India which provide certain tax benefits to individuals if either they or any of their family members are suffering from certain disabilities. Section 80U offers tax benefits if the 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 the tax benefits available under 80U.
2. Persons Who Can Claim Deduction Under Section 80U
A resident individual who has been certified as a person with disability by the medical authority can claim the tax benefit under Section 80U. For the purpose of this section, a person with disability is defined as a person who has at least 40 percent disability certified by the medical authorities.
For the purpose of this section, disability has been defined as one of the following:
- Low vision
- Hearing impairment
- Loco motor disability
- Mental retardation
- Mental illness;
The section also provides a definition for 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.
3. Quantum of Deduction under 80U
Deduction of Rs. 75,000 is allowed for INR 75,000 for people with disabilities and INR1.25 lakhs for people with severe disability.
4. Requirement to Claim Deduction 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 the claim under this section, one must submit the medical certificate indicating the disability together with the income tax return as per Section 139 for 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 for claiming the benefits u/s 80U.
Certificates could be obtained from the medical authorities who could be either a neurologist having a degree of Doctor of Medicine (MD) in Neurology (in case of children, a pediatric neurologist having an equivalent degree) or a civil surgeon or Chief Medical Officer in a government hospital.
5. Difference between Section 80U and Section 80DD
Section 80DD provides tax deductions to the family member people and 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 same of Section 80U. Here, dependent refers to siblings of the assessee, parents, spouse, children or a member of Hindu Unified Family.