Section 80U - Tax Deduction for Disabled Individuals

Section 80U of the Income Tax Act, 1961, provides tax relief to resident individuals with disabilities by offering a fixed deduction from their taxable income. The deduction is Rs.75,000 for persons with disabilities and Rs.1.25 lakhs for those with severe disabilities, subject to certification by authorized medical authorities. 

Key Highlights

• Maximum Deduction: Rs.1.25 lakhs for severe disability (80%+) and Rs. 75,000 for other disabilities.
• Tax Regime: This deduction is available only under the old tax regime.
• Form 10 IA: Taxpayers claiming this disability should file form 10-IA within the due date.

What is Deduction Under Section 80U of the Income Tax Act?

Section 80U of the Income Tax Act, 1961, allows resident individuals with disabilities to claim a flat deduction of Rs 75,000 or Rs 1.25 lakh for severe disabilities from their total income. The disability must be certified by approved medical authorities at any time during the financial year. Taxpayers who have a disability must submit Form 10-IA when filing their Income Tax Returns.

Who can claim a 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 this section, disability has been defined as one of the following:

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

The section also defines a severe disability, which refers to a condition where the disability is 80% or more of one or more disabilities. Severe disability includes multiple disabilities, autism and cerebral palsy.

Quantum of Deduction Under Section 80U

A flat deduction of Rs. 75,000 is allowed for people with disabilities, and a deduction of Rs. 1.25 lakh is allowed for people with severe disabilities.

Requirements to Claim Deductions Under Section 80U

• There is no documentation requirement apart from the certificate certifying the disability from a recognised medical authority, as specified in Form 10-IA.
• There's no need to produce bills for the costs incurred for the pursuit of treatment or other expenses.
• For claiming 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.
• If the disability assessment certificate has expired, one will not be able to claim these deductions for the financial year following the certificate's expiry.
• However, a fresh certificate would be required upon expiry of the validity to claim the benefits under Section 80U.
• This deduction should be claimed within the due date for filing original return of income. (usually 31st July of the next financial year). Since this deduction is available only under the old regime and the old regime can be opted only within the due date, ensure that you file your returns within the due date.

Certificates can be obtained from medical authorities, who may be 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.

Note: If the disability is temporary and requires reassessment after a specific 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 to issue a disability certificate can be any of the following:

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

Form 10 IA Requirement

• Taxpayers who want to claim this deduction can file Form 10IA within the due date for filing returns.
• Alternatively, he can also file the return based on certificate from medical authority to claim this deduction. But is a recommended practice to file Form 10IA to claim this deduction.

Download Form 10IA

Difference Between Section 80U and Section 80DD