The Income Tax Act, 1961 provides a taxpayer with tax benefits if they are suffering from disability. If an individual has been certified as a disabled person or differently abled person by a medical professional, then they are eligible to claim deductions under Section 80U.
If the person is claiming deductions under Section 80U, then the individual himself must be suffering from disabilities, such as, autism, cerebral palsy or other multiple disabilities. The individual applying for these deductions should have a disability level of at least 40%. However, in the case of severe disability, the disability level required is 80%. The Income Tax Department also requires the person who is claiming deduction under this section to satisfy the definition for autism, cerebral palsy or other disabilities as per the act governing the same. The disabilities are generally categorized into 7 sections:
- Low Vision: Vision impairment that can’t be corrected by a surgery but patients are still able to use their vision with help of devices.
- Blindness: Blindness is defined as the complete absence of sight or when the field of vision gets limited by an angle of 20 degrees or the visual accuracy is lesser than 6160 after usage of corrective lenses.
- Hearing Impairment: Hearing power loss of at least 60 decibels.
- Leprosy Cured: Those individuals who have been cured of leprosy but the sensations in feet and hands is lost or any older aged person with extreme deformities that obstructs them from performing any beneficial occupation.
- Mental Retardation: People who have incomplete or arrested development of mental capacities resulting in subnormal intelligence levels.
- Loco Motor Disability: Individuals who get affected with limitations on movements due to disability of joint muscles or bones.
- Mental Illness: The mental disorders not related to retarded mental health.
Conditions for claiming tax deductions under Section 80U
Individuals with a disability level of 40% or more but less than 80% can claim a tax deduction of up to Rs 75,000 in a financial year on the taxable income under Section 80U. A person with severe disability or a disability level of 80% can claim a tax deduction of up to Rs 1,25,000 in a financial year on the taxable income under Section 80U.
Documents required for claiming tax deductions under Section 80U
A medical certificate issued by a certified medical authority is required for claiming the income tax deductions under Section 80U. However, in case of illnesses such as autism and cerebral palsy, the person additionally needs to fill up Form 10-IA.
The medical practitioners must be either a Neurologist having a degree of Doctor of Medicine in Neurology (in case of children, a Pediatric Neurologist having an equivalent degree) or a Civil Surgeon or Chief Medical Officer in a Government hospital.