Trusted by 1 Million+
Secure & Safe
4.8 Star User RatingCheck the eligibility, deduction amount, how to claim, documents, and definitions, for FY 2022-23(AY 2023-24) and what diseases are covered.
The Income Tax Act has prescribed various eligible deductions under Chapter VI A. Deductions help in reducing tax liability, expenditure specific deductions can understand as deductions, which the Government of India promotes by providing tax relief on such expenditures like that in 80C, etc., while another type of deductions are those which Government provides on fulfillment of certain conditions to reduce the Tax burden.
One such deduction is provided under section 80U. These deductions are tax-free in nature and hence are reduced from your gross total income. If the taxpayer is a disabled individual, he/she can claim a deduction under this Section and can lower the overall tax payments. Let’s understand what this section is all about and what deductions it offers –
Section 80U of the Income Tax Act of 1961 states the provisions for tax deductions or tax benefits for individual taxpayers who are suffering from a disability. As per the law, Indian residents who have more than 40% disability are considered persons with disability.
| Category | Permitted Deductions |
|---|---|
| A person with a severe disability* | Rs. 1,25,000/- |
| A person with disability** | Rs. 75,000/- |
*"person with severe disability" means—A condition where the disability is 80 percent or more. Severe disability also includes multiple disabilities, autism, and cerebral palsy.
**"person with a disability" means— A person who has at least 40 percent disability, certified by the medical authorities.
Disability has been defined as one of the following:
Resident individuals who, at any time during the financial year, are certified by the medical authority to be a person with disabilities can claim this deduction for themselves only. The residential status determines the eligibility for this deduction. NRIs are not eligible for this deduction.
The maximum limit of deduction under section 80U is as follows -
If the taxpayer’s aggregate income is INR 10 lakhs and he suffers from a 60% disability, he can avail of a deduction of INR 75,000, which would reduce his total income to INR 9.25 lakhs. The computation of the tax liability would also change. Here’s how –
| Without Section 80U deduction | With Section 80U deduction |
|---|---|
| Gross total income/Taxable income – INR 10 lakhs | Gross Total Income – INR 10 lakhs Taxable Income – INR 9.25 lakhs |
| Tax payable on income between INR 2.5 lakhs and INR 5 lakhs – 5% of INR 2.5 lakhs = INR 12,500 + Tax payable on income between INR 5 lakhs and INR 10 lakhs – 20% of INR 5 lakhs = INR 1 lakh | Tax payable on income between INR 2.5 lakhs and INR 5 lakhs – 5% of INR 2.5 lakhs = INR 12,500 + Tax payable on income between INR 5 lakhs and INR 9.25 lakhs – 20% of INR 4.25 lakhs = INR 85,000 |
|
Total tax payable = INR 1,12,500 Total tax payable after S.H.E.C = INR 1,17,000 |
Total tax payable = INR 97,500 Total tax payable after S.H.E.C = INR 1,01,400 |
Thus, with the deduction available under Section 80U, the taxpayer can save INR 15,600 in taxes in the above situation.
Section 80U covers the following types of disabilities –
The taxpayer is considered as not severely disabled if he/she is suffering from a disability that is 40% or more but below 80%. However, if the taxpayer is suffering from a disability that is 80% or more, it would be termed as a severe disability. The deduction limit varies depending on the severity of the disability suffered.
The person claiming the deduction must keep handy a copy of the certificate issued by the medical authority in the prescribed form. Practically no document is required to be attached with ITR; it is advised to keep the document handy.
Please note that the medical certificate should be submitted certifying the disability suffered. The certificate should be prepared by a recognized medical authority in a prescribed format which is contained in Form 10 -IA The form can be found on the Income Tax India Website -
Thus, it simply implies that if you are taking the deduction under this section, then keep the certificate with you, which you can take from the Authorized Medical Practitioner.
Also, it is suggested that the medical prescription and medical records are safe in case the income tax department asks for the same in the future.
The medical certificate should contain the details of the disability suffered by the taxpayer.
The disability certificate has a specified validity. If the certificate's validity expires in any financial year, the deduction for that financial year can be claimed using the expired certificate. However, from the next financial year, a new certificate would have to be available to claim a deduction under Section 80U in the next year. Taxpayers can get the certificate from certified medical practitioners who are either civil surgeon, a neurologist, or chief medical officer in a government hospital.
Medical authorities who are eligible for issuing a disability certificate can be any of the following –
Section 80U and Section 80DD are often mixed together because both these sections allow deductions for disabled individuals. However, the main difference between these sections is that while Section 80U provides deductions for a disabled individual tax-payer, Section 80DD allows deductions if the taxpayer has a dependent who is suffering from a disability. In the case of an individual, the dependent can be a spouse, children, parents, or siblings, and in the case of HUF, a member of the HUF.
Moreover, the deduction under Section 80DD is allowed if the taxpayer has incurred expenses on treatment, medicines, training, or rehabilitation of the disabled dependent. So, both these sections have different meanings and tax implications and should not be confused to be one.
Whereas under Section 80DDB, if an Individual or HUF incurs any expenditure on the treatment of Specified Diseases for a self or dependent relative can take tax benefit. Dependent relative means spouse, children, brother, sister, parents.
Read more about: Section 80DD Deduction
If you have a disability, you may be eligible for tax deductions under Section 80U. Section 80U can help you lower your tax liability and save money. Talk to our tax experts and get guidance on how to claim Section 80U deduction for FY 2022-23 (AY 2023-24). Don't let your disability stop you from saving taxes.
Book eCA now
for seamless ITR filing.
Deductions help in reducing tax liability; expenditure-specific deductions can be understood as deductions, which the Government of India promotes by providing tax relief on such investments like that in 80C, etc., while other types of deductions are those which the Government provides on fulfillment of certain conditions to reduce the tax burden. One such deduction is provided under section 80U.
Disabled taxpayers should understand the provisions of deduction under Section 80U and utilize these provisions to claim a tax benefit on their taxable income.
Resident individuals who, at any time during the financial year, are certified by the medical authority to be a person with a disability can claim this deduction for themselves only. The amount of deduction depends upon the severity of the disability.
Taxpayers with less than 80% but more than 40% disability get a deduction of Rs.75,000, and taxpayers with severe disabilities, which is 80% or more, get a deduction of Rs.1,25,000. The deduction is a fixed amount that is allowed as a deduction from the taxable income.
No, deductions under Section 80U are allowed only to resident Individuals.
No, if the taxpayer has claimed a deduction under Section 80U, he/she cannot claim another deduction under Section 80DD, although the deduction under this section is for disabled dependents. Similarly, if the taxpayer has claimed a deduction under Section 80DD, he/she cannot claim another deduction under Section 80U for himself.
No medical bills or reports would be required to avail for a deduction under Section 80U. However, a disability certificate issued by an authorized medical practitioner would be required only .
No, the deduction u/s 80U is allowed at a flat rate depending how severe the disability is irrespective of the expenses incurred in treatment or maintenance of the disability.
Yes, tax-payers claiming deductions under Section 80U,, can claim deductions under other sections, too, like Section 80C, Section 80D, Section 80E, etc. But they cannot claim deductions u/s 80DD subject to certain conditions.
A person with a disability means a person who is suffering from at least 40% of a disability. If an individual has a severe disability (i.e., 80% or more of a disability), he is eligible for a deduction of Rs. 1,25,000. Rs 75,000 is the eligible amount for disability less than 80% but more than 40%.
Deduction u/s 80DD & 80U cannot be claimed simultaneously for the same individual. If you have incurred expenses for the medical treatment of a disabled dependent relative, then the aforementioned relative cannot claim deduction u/s 80U.
The amount of deduction that can be claimed depends on the percentage of disability. If the dependent has 40 percent or more disability but less than 80 percent, then the deduction of Rs 75,000 can be claimed in a financial year, and if the disability is 80% or more, then the deduction is INR 1,25,000.
In the current year, you can claim a deduction on the basis of an expired certificate, but to get a deduction in the subsequent year, you need to get a new certificate.
A copy of the certificate of the medical authority in Form 10-IA for certifying a person with a disability, severe disability likeautism, cerebral palsy, and multiple disabilities shall be required for purposes of claiming deduction u/s 80U.
Medical authorities can certify a disabled person. Medical authority here means
