The Section 80U of Income Tax Act 1961 takes care of deductions meant for the Indian residents categorised into the disabled category as per the rules of the government. Any person who has been an Indian resident for the year of assessment and has suffered from at least 40 percent disability as spelt out by the law, qualifies for tax deductions under Income Tax Act 1961.
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 that the government of India has passed. Disability is mainly categorised into 7 types:
- 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 not more than 60 decibels.
- Leprosy Cured: Individuals who have got cured of leprosy, however, whose sensation in hands or feet has lost and paresis in eye or eyelid. Also, senior individuals or individuals with intense deformities 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 low of the government of India also defines rigorous disability other than disability. Severe disability, here, is defined as the condition where an individual suffers from 80 percent or more disabilities in the aforesaid categories. This severe disability comes to include autism, cerebral palsy and multiple disabilities.
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Tax Deduction under Section 80U
Disabled Person (40 percent disability)
Severely disabled person (80 percent disability)
Rs. 1.25 lakhs
Tax deductions under Income Tax Act’s Section 80U are made available for Rs. 1.25 lakhs if there are severe disability and Rs. 75, 000 for the individuals with disabilities. These limits got modified from that of 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, 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 from the upcoming year onwards to claim the benefits under Section 80U. You can obtain certificates from medical authorities who are authorised by the government of India that can include Civil Surgeon at any government hospital, Chief Medical Officer (CMO) paediatric neurologist or MD in Neurology.
Difference between Section 80DD and Section 80U
Section 80DD of the Income Tax Act 1961 offers tax deductions to the kin and family member people with a disability while the Section 80U offers deductions to the person with a disability. Section 80DD also applies if the individual has deposited a particular amount as the premium of insurance to take care of a dependent disabled person. The limits for deductions are same as that of Section 80U. Dependent entails a sibling of an individual, spouse, children or parents or any member of HUF (Hindu Unified Family).
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