♿ Tax Relief for Individuals with Disability: Section 80U Under Income Tax Act! ✨

The Income Tax Act, 1961, provides tax relief for resident individuals who suffer from a disability under Section 80U. This section allows a fixed deduction from the Gross Total Income of such individuals, acknowledging the potential additional costs and challenges they may face due to their disability. Understanding Section 80U is crucial if you are a resident individual with a certified disability, as it offers a direct tax benefit designed specifically for you.

What is Section 80U? (The Concept)

Section 80U provides a deduction from the Gross Total Income (GTI) of an individual assessee who is a resident in India and is certified as a person with a disability.

• Gross Total Income (GTI): The total income computed under all five heads of income (Salaries, Income from House Property, PGBP, Capital Gains, Other Sources), after allowing for set-off of eligible losses.
• Deduction: An amount subtracted from your GTI to arrive at your Total Taxable Income, on which tax is calculated.
• Chapter VI-A: The chapter in the Income Tax Act (Sections 80C to 80U) listing various deductions from Gross Total Income.

The primary purpose of Section 80U is to provide direct tax relief to resident taxpayers who live with a disability, offering a fixed reduction in their taxable income.

Who Can Claim Section 80U Deduction? (Crucial)

The deduction under Section 80U can be claimed only by Resident Individuals.

• Resident Individual: An individual who qualifies as a resident of India as per the residency rules defined in the Income Tax Act.
• Assessee: A person (in this case, a resident individual) by whom tax is payable.

Crucial Condition: The individual claimant of the deduction must themselves be suffering from a disability as defined in the Act.

This deduction is not available to:

• Individuals who are non-resident in India.
• Individuals who do not have a disability.
• Individuals who are claiming the deduction for a dependant’s disability (that falls under Section 80DD).
• Hindu Undivided Families (HUFs), Companies, Firms, Limited Liability Partnerships (LLPs), or any other assessee type.

The Nature of the Deduction Under Section 80U (Fixed Amount)

A key characteristic of Section 80U is that the deduction allowed is a fixed amount.

• The fixed amount depends on the severity of the individual’s disability.
• This fixed amount is deductible irrespective of the actual expenditure incurred by the individual on their own medical treatment, training, or rehabilitation. You do not need to provide bills for expenses to claim this deduction; having the certified disability is sufficient (along with residency status).

The fixed amount is deemed to be the deduction available under this section.

Defining ‘Disability’ and ‘Severe Disability’ for 80U

The definitions used for ‘Disability’ and ‘Severe Disability’ under Section 80U are the same as those used for Section 80DD (deduction for a disabled dependant), based on relevant disability laws.

• Disability: Refers to a person with 40% or more disability as certified by a prescribed medical authority. This includes specific conditions like blindness, low vision, leprosy-cured, hearing impairment, locomotor disability, mental retardation, and mental illness.

   

• Severe Disability: Refers to a person with:

   

  • 80% or more disability as certified by a prescribed medical authority, OR
  • One or more of the specified severe conditions such as multiple disabilities, Autism, Cerebral Palsy, Multiple Sclerosis, Mental Retardation (when certified by a neurologist or civil surgeon).
• Prescribed Medical Authority: A Neurologist, a Civil Surgeon, or any other specialist doctor as notified by the Central Government for certifying such disabilities.

   

The Fixed Deduction Amounts Under Section 80U

For Previous Year 2024-25 (Assessment Year 2025-26), the fixed deduction amounts are:

• If the individual suffers from a ‘Disability‘ (certified as 40% or more but less than 80%): A fixed deduction of ₹75,000.
• If the individual suffers from a ‘Severe Disability‘ (certified as 80% or more, or falling under the specified severe conditions): A fixed deduction of ₹1,25,000.

Medical Certificate is Mandatory! 📄

To claim deduction under Section 80U, it is mandatory to obtain a valid medical certificate in the prescribed form from a prescribed medical authority.

• The certificate serves as proof of the individual’s disability and its severity.
• It must be obtained during the previous year and kept with the assessee’s records.
• The certificate typically specifies the type and percentage of disability. If the certificate has an expiry date or requires periodic review, a fresh certificate must be obtained.

Key Distinction from Section 80DD

It is essential not to confuse Section 80U with Section 80DD:

• Section 80U: Deduction is claimed by a resident individual assessee for their OWN disability. The amount is a fixed deduction based on severity.
• Section 80DD: Deduction is claimed by a resident assessee (Individual or HUF) for expenditure/payment made for a DEPENDANT (spouse, child, parent, sibling for individual; any member for HUF) who has a disability. The amount is also a fixed deduction based on the dependant’s disability severity, but requires that some eligible expenditure or payment has been made.

An individual who has a disability themselves cannot claim deduction under Section 80DD for that disability. Similarly, they cannot claim deduction under Section 80U for a dependant’s disability. However, if a resident individual has a disability and also supports a dependant with a separate disability, they could potentially claim deduction under Section 80U (for self) and Section 80DD (for the dependant’s disability), subject to meeting the conditions of both sections independently.

How to Claim Section 80U Deduction

1. Confirm Eligibility: Ensure you are a resident individual and have a valid medical certificate certifying your disability and its severity obtained during PY 2024-25.
2. Determine Deduction Amount: Determine the fixed deduction amount you are eligible for based on the severity certified (₹75,000 or ₹1,25,000).
3. Claim in ITR: In your annual Income Tax Return (ITR) for AY 2025-26, claim the applicable fixed deduction amount under Section 80U.
4. Maintain Records: You are generally not required to submit the medical certificate with the ITR when filing online, but you must possess it and produce it if requested by the Assessing Officer during assessment.

Examples

Example 1: Individual with Standard Disability

Mr. Amit (Age 40, resident) has a 70% hearing impairment, certified by a prescribed medical authority in PY 2024-25.

• Assessee Type: Resident Individual. (Yes)
• Disability: 70% (between 40% and 80%). (Yes)
• Mr. Amit’s Deduction under Section 80U = ₹75,000. (Fixed deduction for disability).

Example 2: Individual with Severe Disability

Ms. Priya (Age 55, resident) has a severe disability (90% certified) due to multiple sclerosis, certified by a prescribed medical authority in PY 2024-26.

• Assessee Type: Resident Individual. (Yes)
• Disability: 90% (Severe Disability). (Yes)
• Ms. Priya’s Deduction under Section 80U = ₹1,25,000. (Fixed deduction for severe disability).

Example 3: Non-Resident Individual with Disability

Mr. Verma (Age 50, Non-Resident Indian) has a 60% locomotor disability, certified by a medical authority.

• Assessee Type: Individual. (Yes)
• Resident in India: No. (No)
• Mr. Verma’s Deduction under Section 80U = ₹0. (As he is not a resident individual).

Example 4: Individual with Disability AND Disabled Dependant

Mrs. Geeta (Age 45, resident) has a 50% disability (certified). She also incurs expenses for her dependant son who has a severe disability (80% certified).

• For herself:
  • Assessee Type: Resident Individual. (Yes)
  • Disability: 50% (Disability). (Yes)
  • Deduction under Section 80U = ₹75,000.
• For her son:
  • Assessee Type: Resident Individual. (Yes)
  • Supporting Dependant (son). (Yes)
  • Son has Severe Disability. (Yes)
  • She incurs expenses/makes payment for son’s treatment/maintenance. (Yes)
  • Deduction under Section 80DD = ₹1,25,000.
• Total Deduction (80U + 80DD) = ₹75,000 + ₹1,25,000 = ₹2,00,000. (She can claim both deductions as they are for different persons/purposes).

Important Points to Remember about Section 80U

Conclusion

Section 80U provides a direct and valuable tax relief to resident individuals living with a disability by allowing a fixed deduction (₹75,000 or ₹1,25,000) from their Gross Total Income, irrespective of their actual medical expenses. This deduction acknowledges the unique challenges faced by disabled taxpayers. It is crucial to ensure that the disability is certified by a prescribed medical authority and that the claimant meets the residency and individual disability criteria. Importantly, this deduction is available under both the Old and New Tax Regimes from AY 2025-26 onwards.

For accurate tax planning and computation, ensuring the correct certification of disability and understanding eligibility criteria, consulting a qualified tax professional is strongly recommended for individuals with disabilities