Section 80U of Income Tax

Section 80U of the Income Tax Act offers tax benefits if an individual suffers a disability. People can claim an 80U deduction if they have a disability. If the disability is at least 40%, they can claim an 80U deduction of up to Rs. 75000 on their income. The 80U Section of the Income Tax Act 1961 takes care of deductions meant for Indian residents categorized into the disabled category per the government's rules.

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Any person who has been an Indian resident for the year of assessment and has suffered from at least 40 percent disability, as spelled out by the law, qualifies for tax deductions under Section 80U of the Income Tax Act 1961.

Disability Defined:

To qualify for an 80U deduction, an individual should have a disability as defined under the Income Tax Act. Any person suffering from at least 40 percent disability as certified by appropriate medical authorities is defined as a disability. Persons with a disability, abbreviated as PwD, are defined as per the Persons with Disability (Protection of Rights, Full Participation and Equal Opportunities) Act, 1995, which the government of India has passed. Under the 80U Section, disability is mainly categorized into 7 types: 

Income tax disability categories

  • Low Vision: Low vision is applied to individuals who have visual function impairment, which cannot be corrected by any surgery but still have the capability to use their vision via assistance from other devices.

  • Blindness: This disability is referred to as a complete field of limitation of vision or lack of sight by 20 degrees of angle or worse than this, or visual acuity not more than 6160 after the corrective lenses.

  • Hearing Impairment: Hearing impairment is defined if an individual has a hearing power of not more than 60 decibels.

  • Leprosy Cured: Individuals who have got cured of leprosy, however, whose sensation in hands or feet has been lost and paresis in the eye or eyelid. In addition, senior individuals or individuals with intense deformities are obstructed by the performance of any beneficial occupation.

  • Mental Retardation: People having arrested development or incomplete development of mental abilities that results in subnormal levels of intelligence.

  • Loco Motor Disability: Individuals with strictly limited limb movement because of disability of joint bones or muscles.

  • Mental Illness: Mental disorders other than mental retardation. 

The law of the government of India also defines rigorous disability other than disability. Severe disability is defined as the condition where an individual suffers from 80 percent or more disabilities in the categories mentioned above. This severe disability includes autism, cerebral palsy, and multiple disabilities. 

You may also like: Section 80C Deduction of Income Tax act 1961

Tax Deduction under Section 80U

Category Deduction Permitted
Disabled Person (40 percent disability) Rest. 75,000
Severely Disabled Person (80 percent disability) Rest. 1.25 lakhs

Tax deductions under Section 80U of the Income Tax Act are made available for Rest. 1.25 lakhs if there are severe disabilities and Rest. 75,000 for individuals with disabilities. These 80U Section limits were modified from the previous limits of Rs. 1 lakh for intense disability and Rs. 50,000 for disability. These changes came into effect from the year 2015-16.

To register the claim with the 80U income tax form for government employees or other taxpayers, you are required present the medical certificate indicating the disability along with the return of income certificate according to Section 139 for the pertinent year of assessment. If you have an expired disability assessment certificate with you, you still are eligible to claim tax deductions in the expiry year of the certificate. However, you will be asked to submit a fresh certificate to claim the benefits under the 80U Section from the upcoming year onwards. You can obtain certificates from medical authorities who the government of India authorizes, including Civil Surgeon at any government hospital, Chief Medical Officer (CMO) pediatric neurologist, or MD in Neurology. 

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Difference between Section 80DD and Section 80U

Section 80DD of the Income Tax Act 1961 offers tax deductions to kin and family member people with a disability, while Section 80U deduction is allowed for a person with a disability. Section 80DD also applies if the individual has deposited a particular amount as the insurance premium to take care of a dependent disabled person. The limits for deductions are the same as that of the 80U Section. Dependent entails a sibling of an individual, spouse, children, parents, or any member of HUF (Hindu Undivided Family).

So, if you have a disability, use Section 80U deduction when filing your income tax returns. Understand the deduction limit available under Section 80U of the Income Tax Act. Use the limit under the 80U Section to reduce your taxable income and tax liability. 

FAQ's

  • Are NRIs covered for the deduction under Section 80U?

    No, the deduction is available only for resident Indian individuals. NRIs cannot claim the deduction. 
  • Is it possible to claim deductions under both Section 80U and 80DD?

    No, you can claim a deduction under either of the two sections. Therefore, you can claim a deduction under Section 80U or Section 80DD.
  • Can I claim a deduction under Section 80C if I claim a deduction under Section 80U?

    Yes, you can claim a deduction under Section 80C even if you claim a deduction under Section 80U.
  • My disability certificate expired in the current financial year. Can I claim an 80U deduction?

    Yes, you can claim the deduction under Section 80U even if your disability certificate has expired. However, you will need to renew the certificate for the next financial year to become eligible for the deduction. 
  • Which form is required for certifying the disability to claim the deduction?

    You need a medical certificate in Form 10-IA from a medical authority certifying your disability to claim the deduction.
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