Section 80U of Income Tax

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.

Disability Defined:

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: 

1. 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.
2. 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.
3. Hearing Impairment: Hearing impairment is defined if an individual has a hearing power not more than 60 decibels.
4. 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.
5. Mental Retardation: People having arrested development or incomplete development of mental abilities that results in subnormal levels of intelligence.
6. Loco Motor Disability: Individuals with strictly limited limb movement because of disability of joint bones or muscles.
7. 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

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).

FAQs on Section 80U 

Q. What is Section 80u?

Section 80U of the Income Tax Act offers tax benefits to the individuals who suffer from at least 40 percent physical disability as certified by Income Tax Laws.

Q. What are the eligibility criteria for tax deductions u/s 80U?

As per Indian Income tax Laws, physical disability is mainly categorized into 7 types: 

1. Low Vision: Individuals suffer from visual function impairment but can still use their vision by using assistance from other devices, come into low vision categories.
2. Blindness: If an individual suffers from complete loss of vision or lack of sight by 20 degrees of angle, it is considered a case of blindness. In addition to that, if an individual suffers from visual acuity not more than 6160 even after using the corrective lenses, it will be a case of complete blindness.

• Hearing Impairment: In case an individual has a hearing power not more than 60 decibels, he will be categorized with hearing impairment.

1. Cured Leprosy: Individuals who have got their leprosy cured; however, who are still not able to feel any sensation in their hands or feet or has a condition of paresis in their eyes or eyelids.
2. Mental Retardation: Individuals who have arrested or incomplete development of mental abilities that shows subnormal levels of intelligence in them, are categorized into the mental retardation category.
3. Loco Motor Disability: Individuals who have strictly limited movements of limbs because of muscles or joint bones’ disability also fall under this category.

• Mental Illness: Any other mental disorders other than mental retardation come under mental illness and qualify for tax deduction under section 80U. 

There is also a condition as defined by Government of India known as rigorous disability that covers an individual who suffers from 80 percent or more disabilities in the aforementioned categories. Rigorous or severe disability includes conditions such as cerebral palsy, autism and multiple disabilities. 

Q. What is the deduction limit u/s 80U?

For an individual with 40% disability, the tax deduction is allowed for up to Rs 75,000; whereas, for an individual with severe disability, it is up to Rs 1,25,000.

Q. Who can certify you as a disable person?

The below-enlisted medical authorities can certify an individual to be disabled:

A Neurologist with a degree of MD in Neurology

Civil Surgeon or Chief Medical Officer (CMO) of a government hospital

Pediatric Neurologist for children

Q. What are different disabilities covered under section 80U?

Following are the different disabilities covered under Section 80U:
Blindness

• Leprosy-cured
• Low vision
• Hearing impairment
• Mental retardation
• Loco motor disability
• Mental illness
• Cerebral palsy
• Autism

Q. What is the main difference between Deduction u/s 80U & Section 80DD?

80U offers tax deduction is for the employee; whereas, section 80DD is applicable for the dependent of the employee.

Q. Does the deduction amount under section 80U depend on expenditure amount?

The deduction amount under section 80U is a lump-sum one, regardless of how much is your expenditure on medical treatment.

Q. Who can avail deductions under section 80U?

Tax deductions under section 80U can be availed of any individual who is either an Indian resident or NRI who has been certified by a medical authority with disability or severe disability at any time during the last year.

Q. What are the different documents required to avail tax deduction u/s 80U?

The claimant needs to submit a valid certificate from an authorized medical authority. A separate form is needed to be filled for mental illnesses and form number 10-IA for illnesses such as cerebral palsy or autism.

Q. What is the procedure involved to claim deduction under 80U section?

To claim the tax deductions under section 80U, the claimant needs to furnish a copy of the certificate issued by the medical authority along with the ITR  u/s 139, subject to the assessment year for which the deduction is claimed.