Income Tax Deductions under Section 80U are a beacon of support for disabled individuals in India. The government continues to refine and expand its policies for the welfare of the differently-abled.
Section 80U remains a critical component, offering tax benefits and a tangible step towards fostering inclusivity and ensuring financial well-being for those most in need.
What is Section 80U?
Section 80U of the Income Tax Act highlights information about tax deductions a citizen is eligible for if they or any member of their family suffers from certain disabilities. Any citizen who has been clinically certified as an individual with a disability tax exemption can claim the tax benefit under this section.
Income Tax Deductions Under Section 80U
The deduction that a disabled individual can avail on their taxable income is up to ₹75,000. If the disabled individual suffers from 80% disability, the deduction amount is ₹1,25,000.
Considering the first example, where an individual suffers from less than 80% disability and has an aggregate income of ₹10,00,000, a deduction of ₹75,000 will bring the figure to ₹9,25,000. Hence, the tax calculation will change, as well. The table below explains how:
Claiming Income Tax Deductions Under Section 80U
Category
|
Deduction Permitted
|
Disabled Person (40% disability)
|
₹75,000
|
Severely Disabled Person (80% disability)
|
₹1.25 lakh
|
If you want to register a claim, you must provide the medical certificate highlighting the disability. You must also provide a return of income certificate following Section 139 for the assessment year. If your disability tax exemption assessment certificate expires, you will still be eligible to claim tax deductions in the expiration year of the certificate. However, you will need a new certificate from the upcoming year to claim the benefits under section 80U of the Income Tax Act.
Although understanding tax payments can seem daunting, your tax filing process can be smooth with assistance from a tax savings guide. It can provide useful, well-researched information on filing taxes and different ways to lower tax liabilities.
Requirements to Claim Deductions Under Section 80U
Other than the Form 10-IA disability certification from a recognized medical authority, there are no other requirements for documentation. There is no requirement to provide receipts for treatment payments or other expenses.
To lodge a claim under this section, you must have a medical certificate stating that you have a disability and income tax returns filed in compliance with Provision 139 for the relevant AY. If the certificate for the disability evaluation has passed its expiration date, one may still make these deductions in the following year. Starting the following year, you would require a fresh certificate to collect the benefits under section 80U of the Income Tax Act.
Certificates might be issued by civil surgeons, chief medical officers of government hospitals, or neurologists with a Doctor of Medicine (MD) in Neurology degree (or, in the case of children, a pediatric neurologist with an equal degree).
Which Disabilities are Eligible for Income Tax Deductions under Section 80U?
Section 80U of the Income Tax Act 1961 outlines provisions for tax deductions based on disability. To avail of these benefits, it is crucial to comprehend the criteria that define disability under this section. Let us have a quick look:
Minimal Vision
Individuals experiencing permanent visual impairment fall into this category. Despite their condition, they can utilize their eyes with the assistance of specialized devices, emphasizing adaptability and the potential for enhanced functionality.
Hearing Impairment
This category encompasses individuals with a substantial hearing loss of at least 60 decibels. Recognizing the challenges of hearing loss, this classification acknowledges the need for support and accommodations.
Blindness
Complete loss of sight or severely limited vision, where visual acuity measures less than 6/60 even with corrective lenses, qualifies an individual for the classification of blindness. This recognition underscores the varied spectrum of visual impairments and their impact on daily life.
Cured Leprosy
Individuals who have recovered from leprosy but still endure lasting damage to their limbs or eyes are included in this category. The classification also extends to aged individuals or those with severe deformities hindering their engagement in gainful occupations, emphasizing the long-term consequences of leprosy.
Motor Disability
Individuals facing minimal limb movements due to disabilities affecting bones, muscles, or joints fall within the ambit of motor disability. This category acknowledges individuals’ diverse physical challenges, highlighting the importance of recognizing and accommodating these conditions.
Mental Retardation
Individuals experiencing incomplete or partial development of their mental capacities, resulting in subnormal intelligence, are classified under mental retardation. This underscores the need to understand and support those facing cognitive challenges.
Mental Illness
This category encompasses individuals grappling with mental disorders distinct from mental retardation. Recognizing the complexity and diversity of mental health conditions, this classification emphasizes the importance of providing support and accommodation for individuals facing such challenges.
Severe Disability
Apart from the disabilities mentioned above, the act also includes a category for severely disabled individuals. Hence, the tax deduction limit will vary accordingly. If one suffers from more than 80% disability or more in the above categories, then they are considered severely disabled. Disabilities like cerebral palsy and autism are included in this category.
Summing Up
The income tax laws in India provide the benefit of tax deductions for individuals with disability under Section 80U. If you have any disabilities listed by the law, you are eligible for these deductions. To claim the benefits, you will need to provide the medical certificate certifying the disability and the return of income certificate.
Key takeaways
- Individuals with a certified disability are eligible for income tax deductions under Section 80U, provided they possess a valid disability certificate.
- The disability certificate must be issued by a competent medical authority, specifying the degree of disability, and should be renewed periodically as required.
- The maximum deduction allowed under Section 80U is ₹75,000 for individuals with a disability and ₹1,25,000 for those with severe disability, helping to alleviate the financial burden associated with disability-related expenses.
- Section 80U covers a wide range of disabilities, including blindness, low vision, hearing impairment, locomotor disability, mental retardation, and mental illness, among others.
