Section 80U of the Income Tax Act, of 1961 includes provisions for tax deduction benefits to individual taxpayers suffering from a disability. Generally, a taxpayer can claim a deduction under Section 80U when filing an Income Tax Return. However, it is important to understand the exact provisions of Section 80U. The amount of deduction available depends on the type and severity of the disability. A taxpayer with a 40% disability is not considered severely disabled, while a taxpayer with an 80% disability is considered a seriously disabled person.
The disability act also provides a definition of severe disability which refers to the condition where the disability is 80% or more. A person suffering from multiple disabilities will also be considered severely disabled.
In order to be eligible for Section 80U deduction, a taxpayer must be an individual and be a resident of India. The taxpayer must also be certified by a medical authority as being disabled. The medical authority must be a recognized medical authority. A medical certificate must include details of the disability suffered by the taxpayer. If the medical certificate has expired, the taxpayer must acquire a fresh certificate in order to qualify for deduction under Section 80U.
The benefits of having an 80U deduction
- A person with Disability: If a person is suffering from at least 40% disability, he/she can claim a tax deduction upto Rs.75,000 on the taxable income under section 80U.
- A person with Severe Disability: If a person is suffering from severe disability i.e suffering 80% disability (either from one or multiple ailments) can claim a tax deduction upto Rs. 1.25 lakh under section 80U.
Section 80U deduction is offered in the form of a lump-sum amount. This is applicable to employees and individuals with disabilities. Individuals with disabilities are eligible for deductions under Section 80U for self, family members, and next of kin. In addition to the Section 80U deduction, an individual can also claim tax benefits under Section 80DD and 80DDB. A taxpayer can claim a deduction under Section 80DD if he or she has made an insurance premium payment for a dependent disabled person. An individual may also claim a deduction under Section 80DD for treatment and rehabilitation.
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