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Pay 10,000/month for 10 years, Get 1,65,805/Year* for next 15 years.
ARN. No. KLI/23-24/E-BB/1201
Features
Ref. No. KLI/22-23/E-BB/999
Section 80U of the Income Tax Act provides significant deductions for disabled individuals in India, offering financial relief based on the severity of disability, with a maximum deduction.
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.
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.
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.
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).
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:
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.
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.
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.
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.
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.
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.
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.
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.
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.
Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.
Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors
Pay 10,000/month for 10 years, Get 1,65,805/Year* for next 15 years.
ARN. No. KLI/23-24/E-BB/1201
Features
Ref. No. KLI/22-23/E-BB/999
The information herein is meant only for general reading purposes and the views being expressed only constitute opinions and therefore cannot be considered as guidelines, recommendations or as a professional guide for the readers. The content has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Recipients of this information are advised to rely on their own analysis, interpretations & investigations. Readers are also advised to seek independent professional advice in order to arrive at an informed investment decision. Further customer is the advised to go through the sales brochure before conducting any sale. Above illustrations are only for understanding, it is not directly or indirectly related to the performance of any product or plans of Kotak Life.
