Section 80U: Tax Deductions for Disabled Individuals

We all know that health insurance is a tool that provides financial protection against critical illnesses, along with certain tax benefits to the policyholders. But most of us aren’t familiar with Section 80U of the Income Tax Act, which provides tax exemption to individuals with disabilities. According to this provision, any individual who suffers from a disability of 40–80% and has been an Indian resident for a particular assessment year can claim tax exemption. 

In this blog post, we’ll walk you through the disabilities that are eligible for tax exemption under Section 80U, along with the process, in detail. Read on to find out!

Disabilities Eligible For Tax Exemption Under Section 80U 

The diseases that qualify for a tax exemption under Section 80U of the Income Tax Act are listed below. 

1. Any individual who has visual function impairments that cannot be rectified surgically but can still use their eyesight with the help of assistive equipment.
2. Blindness means the complete loss of sight or vision that is limited by an angle of 20 degrees or less or eyesight less than 6160 after surgical glasses.
3. Loss of hearing power up to 60 decibels. 
4. Individuals who have been cured of leprosy but have lost sensation in their feet or hands, and have nerve palsy in their eyelids and eyes. Moreover, elderly people with severe abnormalities those who cannot perform any useful occupation.
5. Individuals with insufficient or delayed mental ability development, resulting in low functioning cognitive levels.

Amount That You Can Claim As Tax Deduction Under Section 80U

You can claim tax deductions under Section 80U, depending on the severity of the disability. Listed below 

1. A disabled person is defined as somebody who suffers from at least 40% impairment. If the prerequisites are met, the individual may claim a tax deduction of Rs. 75,000 under Section 80U. 
2. A person with a severe disability is someone who has at least 80% of a disability or multiple disabilities. If the conditions are met, the individual is entitled to a tax deduction of Rs. 1,25,000.

How To Claim a Tax Deduction Under Section 80U? 

In order to claim a tax deduction under Section 80U of the Income Tax Act, 1961, you will need the following documents: 

1. Medical certificate issued by a valid medical institution stating your disability
2. Income certificate as per Section 139. 
3. Forms respective to a particular disability

If your disability assessment certificate expires, you can still claim deductions in the year that the certificate is set to expire. Nevertheless, starting next year, a new certificate will be required to claim tax deductions under Section 80U of the Income Tax Act. 

Difference Between Section 80U And Section 80DD

The major difference between Section 80U and Section 80DD of the Income Tax Act is that Section 80U provides tax benefits for disabilities, whereas Section 80DD provides tax exemption for some specified critical illnesses such as cancer, neurological diseases, and more. 

Conclusion 

In conclusion, in Section 80U of the Income Tax Act, any individual suffering from a disability, such as partial or complete blindness, hearing impairment, and more, can claim tax benefits. You will need a medical certificate issued by a valid medical practitioner to claim a tax deduction.

Also read: Everything You Need To Know About Section 10 (10D)