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What is Section 80U, Deduction for Handicapped Assessee?
Section 80U of the Income Tax Act, 1961, provides a tax deduction to individuals with a disability. It allows a deduction of up to Rs. 1,25,000 for taxpayers with specified disabilities, subject to certain conditions and certification from a medical authority.
Note: This deduction is applicable only if you choose to follow the old tax regime.
Who is eligible to claim Deduction under Section 80U for Handicapped Assessee?
Resident Individual is eligible to claim Deduction under Section 80U for Handicapped Assessee: An individual who is a resident and has been officially recognized as having a disability by the medical authorities is eligible to avail the tax deduction under Section 80U. According to this section, a person is considered to have a disability if they have a minimum of 40% disability, as certified by the relevant medical authorities.
What is Disability and Severe Disability under Section 80U?
Under Section 80U, disability is categorized into the following conditions:
1. Blindness
2. Low vision
3. Leprosy-cured
4. Hearing impairment
5. Locomotor disability
6. Mental retardation
7. Mental illness
8. Additionally, the section defines severe disability as a condition where the disability is 80% or more. Severe disability also encompasses multiple disabilities, autism, and cerebral palsy.
What is the Amount of Deduction for Handicapped Available Under Section 80U?
Following is the amount of deduction for Handicapped available under Section 80U for Normal & Severe Disability:
1. Normal Disability: Rs. 75,000
2. Severe Disability: Rs. 1,25,000
What is the Criteria for Availing Deductions Under Section 80U related to Handicapped Assessee?
To claim the deduction under Section 80U, the only required documentation is a certificate of disability from a recognized medical authority, in Form 10-IA. There is no need to provide bills for treatment costs or any other related expenses.
When making a claim under this section, the individual must submit the medical certificate verifying the disability along with their income tax returns filed under Section 139 for the relevant assessment year (AY). If the disability certificate has expired, the deduction can still be claimed for the year in which the certificate expires. However, a new certificate will be required in the subsequent year to continue claiming the benefits under Section 80U.
The required certificate can be obtained from a medical authority, which includes a neurologist with a Doctor of Medicine (MD) in Neurology, a pediatric neurologist (for children), or a civil surgeon or Chief Medical Officer at a government hospital.
Note: If the disability is temporary and needs reassessment after a specific period, the validity of the certificate begins from the assessment year corresponding to the financial year in which it was issued and ends in the assessment year corresponding to the financial year when the certificate expires.
Which Medical Authorities Are Authorized to Issue Certificates Under Section 80U for Handicapped Assessee?
The following medical authorities are authorized to issue a disability certificate under Section 80U:
A neurologist with an MD (Doctor of Medicine) in Neurology
A civil surgeon in a government hospital
A Chief Medical Officer in a government hospital
A pediatric neurologist with an MD (Doctor of Medicine) in Neurology, specifically for disabled children.
What is the Difference between Section 80U for Handicapped Assessee and 80DD for treatment of family member disability?
Section 80U and Section 80DD both provide tax benefits for individuals with disabilities, but they have key differences:
Eligibility:
1. Section 80U: Available to individuals who are resident and certified as having a disability by medical authorities.
2. Section 80DD: Available to residents who incur expenses for the treatment, training, or rehabilitation of a dependent family member with a disability.
Type of Benefit:
1. Section 80U: Provides a direct deduction to the individual with a disability.
2. Section 80DD: Provides a deduction for the care and support of a dependent family member with a disability.
Amount of Deduction:
1. Section 80U: Offers a fixed deduction of ?75,000 for individuals with a disability, and ?1,25,000 for those with a severe disability (80% or more).
2. Section 80DD: Provides a deduction of ?75,000 for a dependent with a disability, and ?1,25,000 for a severe disability (80% or more).
Documentation:
1. Section 80U: Requires the individual to provide a disability certificate from a recognized medical authority.
2. Section 80DD: Requires proof of expenses incurred for the treatment or rehabilitation of the disabled dependent, along with a certificate of disability for the dependent.
In summary, Section 80U is for individuals with disabilities, while Section 80DD is for those supporting dependents with disabilities.
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