Section 80 U: Income Tax Deduction for Disabled Individuals
Section 80U of Income Tax Act, 1961 allows disabled individuals to claim tax benefits. Any Indian resident who is suffering from a disability can claim a tax exemption of up to Rs 75,000 on his/her annual income. The tax provision enables disables individuals to enjoy tax relaxations while filing ITR.
Indian residents who are categorized disabled as per the laws set by the Indian government can claim tax deductions provided under Section 80U. The person claiming tax exemption should be an Indian resident during the assessment year and is suffering from at least 40% disability as defined under the law.
Eligibility Criteria to Claim Deduction Under Income Tax 80U
As said, Section 80U allows Indian residents suffering a disability as certified by the recognized medical authority to claim tax deductions. The basic criteria to be met is that the disability should be at least 40%, which is to be certified by the authorized medical institution.
Definition of Disability Under Section 80U
Disability is defined as per the Persons with Disability Act, 1995 passed by the Indian government. The individual should be 40% disabled to be eligible for claiming tax benefits under the section. A disability that is applicable under this section can be any of the following:
- Low Vision: People who have a visual impairment that cannot be corrected through surgery but who are still able to see through any vision assistive device.
- Blindness: People who have a complete absence of vision or the field of vision is limited at 20 degrees or worse, or the ones with visual acuity below 6160 after using corrective lenses.
- Leprosy Cured: People who are cured of leprosy but have lost sensation in hands or feet and have paresis in an eye or eyelid. The category also includes people who cannot perform any occupation due to extreme deformities developed due to leprosy.
- Hearing Impairment: People having hearing impairment with at least 60 decibels loss of hearing power.
- Mental Illness: Any mental disorder except mental retardation.
- Mental Retardation: People who have subnormal intelligence levels arising from incomplete or inability to develop their mental ability.
- Loco Motor Disability: People who have disabled limbs due to inability to use joint muscles or bones.
Section 80U also defines severe disability which is a condition where the disability is at least 80%. Individuals categorized under severe disability are allowed to claim higher tax deductions. The severe disability category also includes other types of disabilities such as autism and cerebral palsy.
80U Deduction: Types
|Category of Disability||Definition of Disability||Maximum Tax Deductions|
|Person with Disability||Disability at least 40%||Rs 75,000|
|Person with Severe Disability||Disability at least 80%||Rs 1,25,000|
The 80U deductions for AY 2020 21 are Rs 75,000 and Rs 1,25,000 for persons suffering from Disability and Severe Disability respectively. The tax deduction limits were introduced in 2015-16. Previously, the limit was Rs 50,000 for individuals categorized under Disability and Rs 1,00,000 for individuals categorized under Severe Disability.
How to Claim Tax Deductions Under Section 80U Income Tax?
Except for the disability certificate obtained from the recognized medical authority, the taxpayer does not need to produce any document in order to claim deductions under Section 80U.
How to Obtain a Disability Certificate?
One can obtain the required disability certificate from the below mentioned authorities:
- Civil surgeon or Chief Medical Officer (CMO) who works in a government hospital
- Neurologist having an MD (Doctor of Medicine) degree in Neurology
- Pediatric Neurologist in case the disabled individual is children
The individual who wants to claim tax deductions under Section 80U of Indian Tax Act must submit the furnished disability certificate while filing ITR as per the provisions laid under Section 139 for the relevant AY.
- Do I need to submit medical bills for the costs incurred while treating disability or any other medical expense?
No, there is no need to furnish medical bills or receipt of medical expenses. However, you need to submit the disability certificate while filing the ITR.
- My disability certificate has expired, can I still claim deductions?
Yes, you can claim a deduction under Section 80U even for the year in which the medical certificate has expired. However, you need to renew the disability certificate to claim the tax benefits in the following years.
- Can I claim tax deductions for my disabled family member?
No, Section 80U only allows tax deductions for disabled individuals and not their family members. You need to refer to Section 80DD of the Indian Tax Act in order to claim tax deductions for any of your dependent family members with a disability. Dependent family members include children, spouse, parents, and siblings of the disabled individual.
- My disability is over 80%, how much tax deductions am I allowed to claim?
You can claim tax deductions of up to Rs 1.25 lakhs if you have a disability of 80% or more.
- When did the changes in the maximum tax deduction amounts under Section 80U come into effect?
The changes in the maximum tax deductions that a disabled individual can claim came into effect in the AY 2020-21. Now, individuals with a disability can claim a maximum tax deduction of Rs 75,000, whereas, individuals with a severe disability can claim a maximum tax deduction of Rs 1,25,000.
- How many disability categories are there that are eligible under Section 80U?
There are a total of seven disability categories- low vision, blindness, leprosy cured, hearing impairment, mental impairment, mental retardation, and locomotor disability.
- Which category of disability is autism placed in?
An individual suffering from Autism is placed under the category of severe disability. He can claim tax deductions of up to Rs 1,25,000 while filing ITR.
- Can children claim tax deductions under Section 80U?
Yes, children can also claim tax deductions under Section 80U and the exemption amount is also the same. However, in the case of children, the disability certificate has to be issued from a Pediatric Neurologist.
- What is the need for form 10-IA while claiming tax deductions?
For cerebral palsy, and autism, the disabled individual has to file for 10-IA in order to claim deduction under Section 80U.