Section 80U Of The Income Tax Act- Deductions For Disabled Taxpayers
The Income Tax Act prescribes various tax deductions under Chapter VIA through which taxpayers can reduce their gross total income. Section 80C to Section 80U under Chapter VIA allow deductions for various expenses and investments for different needs of taxpayers. Section 80U of the Income Tax Act offers tax benefits for those suffering from specific disabilities.
Read along to know more about the provisions of this section.
Table of contents
Provisions under Section 80U of the Income Tax Act
Section 80U offers a flat tax deduction to individuals suffering from certain disabilities every assessment year. Those who are resident Indians and categorised as disabled according to government rules, i.e. having 40% or more disability, can claim this deduction.
These are fixed deductions regardless of the taxpayer’s actual expenses for medical treatment or other costs. The amount of deduction you can claim depends on the percentage of disability.
- For 40% or more disability — flat deduction of Rs. 75,000
- For severe disability (80% or more — flat deduction of Rs. 1,25,000
Before FY 2020-21, the limits were Rs. 50,000 for normal disabilities and Rs. 1,00,000 for severe cases. To claim this deduction, you will need to produce proof of your disability from recognised medical authorities.
Also Read- How To Pay Income Tax Online?
Who Can Claim Deductions under Section 80U?
The Persons with Disabilities Act 1995, also called Equal Opportunities, Protection of Rights and Full Participation Act, defines the ‘term’ disability. It describes only those having 40% or more than 40% disability certified by recognised medical authorities.
Disability u/s 80U refers to someone suffering from one of the following conditions:
- Hearing impairment
- Mental retardation
- Mental illnesses
- Low vision
- Blindness
- Autism
- Cerebral palsy
- Leprosy cured
- Locomotor disability
- Multiple disabilities
In the case of severe disabilities, assesses can claim the maximum deduction amount. This includes a disability of 80% or more in one of the conditions mentioned above.
Cerebral palsy, autism and multiple disabilities are defined by the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999.
Definitions of Medical Conditions u/s 80U
Those claiming deductions under Section 80U of the Income Tax Act must satisfy the definition of medical conditions as per applicable laws. The following are the definitions of conditions covered u/s 80U.
Low vision
This refers to visual impairment which cannot be fully corrected with surgery or standard refractive correction. They can still use their vision for daily tasks with an assisting device.
Blindness
Blindness includes those suffering from a total absence of sight, 20 degrees or less field of vision or those with visual acuity of 6160 Snellen or less with correcting lenses.
Hearing impediment
It refers to hearing loss of sixty decibels or more in the better ear.
Locomotor disability
This includes people suffering from severely limited mobility due to disabilities in joint muscles or bones.
Leprosy cured
This refers to those who are cured of leprosy but continue to suffer from disabilities. It includes senior citizens with extreme deformities which prevent them from undertaking any occupation and those who have lost sensation in limbs and eyes.
Mental retardation
Those who grew up with incomplete or arrested development of mental capabilities resulting in subnormal intelligence levels.
Mental illnesses
This covers other mental disorders.
Severe disabilities also include multiple disabilities, autism and cerebral palsy.
Also Read – Section 80D Of Income Tax Act
Conditions for Availing Deduction under Section 80U
- It can be claimed by any Indian citizen residing in the country and not by non-resident individuals.
- It is available under the old or existing income tax regime.
- Only taxpayers with a certificate of disability from prescribed medical authorities can claim deductions u/s 80U.
- Only medical practitioners authorised by the government can issue disability certificates. This included neurologists with an MD in Neurology, paediatric neurologists, civil surgeons or a Chief Medical Officer of a government hospital.
- You do not need to furnish any documents such as prescriptions or medical bills. You will only need to fill out Form 10-IA.
- When claiming the deduction, you will need to submit Form 10-IA denoting your medical condition as per Section 139.
- If your disability certificate has expired, you can still claim deductions in the year of expiry. However, you will have to furnish a new certificate in the next assessment year to claim benefits u/s 80U.
- In the case of temporary disabilities, the certificate may have limited validity, after which you have to get a reassessment.
Differences between Section 80DD and Section 80U of the Income Tax Act
Section 80DD of the Income Tax Act allows deductions similar to Section 80U. However, Section 80DD provides tax deductions to family members of the differently-abled taxpayer.
Section 80DD is applicable for any medical expenditure towards caring and maintenance of a differently-abled relative. This includes nursing, training and rehabilitation of the person and also for contributions towards any insurance policy of LIC or another insurer.
Section 80U allows deductions for only the individual suffering from the aforementioned medical conditions. It does not allow parents, children, spouses or a member of HUF (Hindu Undivided Family) to claim deductions. Moreover, if the taxpayer claims the deduction for himself, no family members can claim deductions u/s 80DD.
Final Word
Section 80U of the Income Tax Act allows taxpayers with disabilities to claim tax deductions and reduce their own tax liability. It allows deductions at a fixed limit of Rs. 75,000 and Rs. 1.25 lakh based on the person’s percentage of disability. However, his/her immediate relatives will not be able to claim deductions u/s 80DD at the same time.
Frequently Asked Questions
What type of disorder is cerebral palsy?
It refers to a medical condition that negatively impacts the patient’s ability to move and maintain balance. This is a common motor disability affecting children in particular and is generally caused by abnormal development or damage to the brain. This, in turn, weakens their ability to control muscles.
What is autism spectrum disorder?
The term ‘autism’ refers to a complex brain development disability that starts from early childhood and impacts the affected child’s social skills, communication and relationships. As it impacts different people in different ways and to varying degrees, it is called a spectrum condition.
What is the basis of assessing physical disabilities?
Doctors perform an assessment of affected body parts referring to government guidelines to determine the percentage of disability. For example, in case of a disability of an arm, they will measure the loss of motion, coordination and muscle strength and add the percentage of loss for each factor.
The respective medical boards at State or district levels are responsible for issuing disability certificates. Such a board consists of a district-level chief medical officer or sub-divisional medical officer and an expert in the specified field.
What are the requirements to get a disability identity card?
The person applying for a disability ID card must have certification of disability from the appropriate authority. They also must have the following minimum percentage of disability:
- Blindness- 90% or more
- Hearing disorders- 90 decibels
- Mentally handicapped- 35%
- Orthopedically- 40%
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