Section 80U of the Income Tax Act
There is a tax deduction for people with disabilities. To know more about the requirements to claim tax deductions under Sec 80U, Vakilsearch experts are here to help!
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Section 80U - Overview
Section 80U of the Income Tax Act, 1961 incorporates requirements for tax deduction benefits to specific taxpayers suffering from a disability. To claim tax deduction under section 80U, the individual must be approved as a person with a disability by an appropriate medical authority.
Conditions to Claim Deductions Under Section 80U
A resident who has received a disability certification from a medical authority is eligible to claim the tax benefit under Section 80U. A person with a disability is someone who, according to the medical authorities, has at least a 40% disability for the purposes of this provision.
The following list serves as a definition of disability for the purposes of section 80U:
- Blindness
- Poor vision
- Leprosy-cured
- Impaired hearing
- Locomotor impairment
- Mental disability
- Mentally ill
The definition of a severe disability, which refers to a condition where the disability is at least 80%, is also provided in this section. Multiple impairments, autism, and cerebral palsy are also considered severe disabilities.
What Is the Amount of Deduction Available Under Section 80U?
As previously stated, the value of the deduction is based on how severe the impairment is. As a result, taxpayers with a disability of 80% or more may deduct ₹1,25,000 lakhs from their taxes, while taxpayers with a disability of less than 80% may deduct ₹75,000.
Example of 80U Eligibility
Given under the table has details about how tax deduction work under 80 U for disabled people:
| Without Section 80U deduction | With Section 80U deduction |
|---|---|
| Gross total income/Taxable income – INR 10 lakhs | Gross Total Income – INR 10 lakhs Taxable Income – INR 9.25 lakhs |
| Tax payable on income between INR 2.5 lakhs and INR 5 lakhs – 5% of INR 2.5 lakhs = INR 12,500 + Tax payable on income between INR 5 lakhs and INR 10 lakhs – 20% of INR 5 lakhs = INR 1 lakh | Tax payable on income between INR 2.5 lakhs and INR 5 lakhs – 5% of INR 2.5 lakhs = INR 12,500 + Tax payable on income between INR 5 lakhs and INR 9.25 lakhs – 20% of INR 4.25 lakhs = INR 85,000 |
| Total tax payable = INR 1,12,500 | Total tax payable = INR 97,500 |
Hence, with the deduction possible under Section 80U, the taxpayer can save INR 15,000 in taxes in the above situation.
Key Features of Section 80U
A certificate from a medical authority in Form 10-IA is requested of the person claiming a deduction under Section 80U.
The medical professionals from whom a certificate may be obtained are listed below:
- A government hospital's chief medical officer (CMO) or civil surgeon.
- A child's neurologist (in case of children).
- A neurosurgeon with a Doctor of Medicine in Neurology degree.
- When submitting an income tax return, the certificate in Form 10-IA must be supplied.
- The deduction under section 80U will not be allowed if the medical authority's declared certificate of disability expires or is terminated, unless a new certificate is obtained.
Section 80U and Section 80DD
While Section 80U provides tax deductions to the specific taxpayer with a disability themselves, Section 80DD provides deductions to the taxpayer's family members and family of the taxpayer with a disability. If a taxpayer pays a predetermined amount as an insurance incentive or premium for caring for a dependent disabled person, section 80DD applies. The deduction purposes under Section 80DD are the same as those under Section 80U. In this case, a dependent is someone who is a parent, spouse, assessee, child, or member of a Hindu Undivided Family's sibling.
Documents Required for Claiming Tax Benefits Under 80U
Other than the disability certification from a reputable medical authority in Form 10-IA, there is no other documentation needed. There is no need to present receipts for the costs associated with seeking treatment or other expenses.
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