Section 80U of the Income Tax Act, 1961 allows resident individuals with disability to claim a flat deduction of Rs 75,000 or Rs 1.25 lakh for severe disability from their total income. The disability has to be certified by the approved medical authorities at any time during the financial year. The taxpayers suffering from disability must submit disability certificate or Form 10-IA while filing their income tax returns. Here, we will discuss in detail how section 80U helps individuals with disability by allowing a fixed deduction to reduce their taxable income and thereby providing financial relief and security.
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:
The section also provides a definition for a severe disability which refers to a condition where the disability is 80 percent or more of one or more disability. Severe disability includes multiple disabilities, autism and cerebral palsy.
A flat deduction of Rs.75,000 is allowed for people with disabilities and a Rs 1.25 lakh for people with severe disability.
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 paediatric 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.
Medical authorities who are eligible for issuing a disability certificate can be any of the following:
Parameters | Section 80U | |
Eligibility |
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Who can claim the deduction? | Taxpayer who has incurred an expenditure in medical treatment (including nursing, training and rehabilitation), or deposited a specified amount as an insurance premium for taking care of his/her dependent with disability. | Taxpayer who is himself/ herself certified with at least 40% disability by the approved medical authority. |
Deduction limit |
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Dependent | Spouse, children, parents, brother, sister of the taxpayer or a member of HUF | Deduction is claimed by the individual for his own disability |
Tax regime | Applicable under old tax regime only | Applicable under old tax regime only |