Understanding Section 80U

Section 80U of the Income Tax Act, 1961, provides a significant relief to individuals with disabilities by offering a tax deduction on their total income. This section acknowledges the financial challenges faced by people with disabilities and aims to provide them with some financial respite.

What is Section 80U?

Under Section 80U, individuals with disabilities can claim a deduction from their total income. This deduction is available to both resident and non-resident individuals, making it inclusive for all eligible taxpayers.

Eligibility for Section 80U – Who can claim this deduction?

To be eligible for the deduction under Section 80U, an individual must be certified as a person with a disability. The certification must be obtained from a medical authority, and the disability should be at least 40%. Individuals with severe disabilities, i.e., 80% or more, are eligible for a higher deduction.

Example of eligibility

For instance, if an individual has a disability of 60%, they can claim a deduction of Rs. 75,000. If the disability is 85%, the deduction limit increases to Rs. 1,25,000.

Deduction limit under Section 80U

The deduction limit under Section 80U of the Income Tax Act, 1961, depends on the severity of the disability. Section 80U provides tax benefits to individuals with disabilities, and the deduction limit varies based on the percentage of disability. Here are the deduction limits under Section 80U:

1. Disability between 40% and 80%:

The maximum deduction allowed is Rs. 75,000.

2. Severe disability (80% or more):

In cases where the disability is 80% or more, the deduction limit increases to Rs. 1,25,000.

In simpler terms, individuals with disabilities falling within the range of 40% to 80% can claim a deduction of up to Rs. 75,000, while those with severe disabilities, i.e., 80% or more, can claim a higher deduction of up to Rs. 1,25,000.

It's important to note that the percentage of disability must be certified by a medical authority, and individuals need to submit the relevant medical certificate while claiming the deduction. The certificate should be in the prescribed format and include details such as the nature of the disability and the percentage of disability as determined by the medical authority. The medical authority can be a neurologist with a Doctorate in Neurology (DM), a civil surgeon, or Chief Medical Officer in a government hospital, among others, as specified by the income tax rules.

Which disabilities are covered under Section 80U

Section 80U of the Income Tax Act, 1961, covers a wide range of disabilities. These disabilities are categorised to include various physical and mental conditions that may impact an individual's ability to lead a normal life. The disabilities covered under Section 80U include:

1. Blindness: Complete lack of vision or visual acuity not exceeding 6/60 or 20/200 in the better eye with correcting lenses.
2. Low vision: Visual acuity not exceeding 6/18 or 20/60 in the better eye with correcting lenses.
3. Hearing impairment: Loss of sixty decibels or more in the better ear in the conversational range of frequencies.
4. Leprosy-cured: Individuals who have been cured of leprosy but still suffer from deformities due to the disease.
5. Locomotion disability: A person's inability to execute distinctive activities associated with the movement of self and objects, resulting from affliction of the musculoskeletal or nervous system or both.
6. Mental retardation: General mental abilities that are significantly below average, along with limitations in adaptive functioning.
7. Mental illness: Any mental disorder other than mental retardation.
8. Multiple disabilities: A combination of two or more disabilities mentioned above.

How to claim a deduction under Section 80U

To claim a deduction under Section 80U of the Income Tax Act, individuals with disabilities need to follow a systematic process. Here is a step-by-step guide on how to claim a deduction under Section 80U:

1. Obtain a medical certificate from a recognised medical authority specifying the nature and percentage of disability.
2. Ensure that the certificate adheres to the prescribed format provided by the Income Tax Department.
3. Keep a copy of the medical certificate and supporting documents for verification.
4. Complete the Income Tax Return form, providing necessary details related to Section 80U.
5. Submit the return online or through the appropriate mode as per guidelines.
6. Be prepared for possible verification by the Income Tax Department, ensuring accuracy in information and documentation.

Requirements to claim deductions under Section 80U

The certificate must be in the prescribed form and should be signed by a medical authority. The details of the medical authority and the specific format can be obtained from the Income Tax Department's official website.

What are the categories of disabilities under Section 80U of the Income Tax Act?

Section 80U of the Income Tax Act provides tax deductions to individuals with specific disabilities. The categories of disabilities under Section 80U include:

1. Blindness: Complete or partial loss of vision.
2. Low vision: Significant visual impairment even after treatment.
3. Leprosy-cured: Individuals cured of leprosy but with residual disabilities.
4. Hearing impairment: Total or partial hearing loss.
5. Locomotor disability: Significant restriction of movement due to disability.
6. Mental retardation: Intellectual functioning significantly below average.
7. Mental illness: Severe mental disorders impacting daily life.

These categories ensure targeted financial relief for individuals facing these specific challenges.

List of related income tax deduction sections