Section 80U

What is Section 80U?

Section 80U allows resident individuals with certified disabilities to claim a fixed deduction from their gross total income. For the financial year 2025-26, individuals with disabilities ranging from 40% to 80% can claim a deduction of ₹75,000, while those with severe disabilities (80% or more) can claim ₹1,25,000. This deduction is only available under the old tax regime and not the new tax regime introduced in Budget 2025.

Eligibility Criteria for Section 80U

To claim the deduction under Section 80U, the following conditions must be met:

• The individual must be a resident of India.

• The disability must be at least 40%, certified by a recognised medical authority.

• The disability must fall under specific categories such as blindness, low vision, hearing impairment, locomotor disability, mental illness, and other listed conditions.

A medical certificate in Form 10-IA, issued by a certified neurologist, civil surgeon, or Chief Medical Officer in a government hospital, must be submitted along with the income tax return.

Types of Disabilities Covered

Section 80U covers various disabilities, including:

• Blindness

• Low vision

• Leprosy-cured

• Hearing impairment (at least 60 decibels loss)

• Locomotor disability

• Mental retardation

• Mental illness

Example of Section 80U Deduction

Suppose Mr. Sharma has a certified disability of 60%. For FY 2025-26, he can claim a deduction of ₹75,000 from his gross total income. If his total income is ₹8,00,000, his taxable income will be reduced to ₹7,25,000, leading to tax savings.

If Mr. Sharma had a severe disability of 85%, he would be eligible for a higher deduction of ₹1,25,000, reducing his taxable income to ₹6,75,000.

Key Benefits of Section 80U

• Fixed Deduction: Section 80U offers a flat deduction, unlike other tax benefits that require proof of expenditure.

• Additional Relief: This deduction can be claimed alongside other eligible deductions under Chapter VI-A of the Income Tax Act.

• Financial Support: It acknowledges the additional financial strain faced by individuals with disabilities.

Challenges and Limitations

• Regime Limitation: The deduction is only available under the old tax regime and not the new tax regime for FY 2025-26.

• Documentation Renewal: If the disability certificate expires, a new certificate must be submitted to continue claiming the deduction.

• Limited Coverage: Not all disabilities or chronic conditions are covered, potentially excluding individuals with other forms of disability.

• Mutual Exclusivity: An individual claiming a deduction under Section 80U cannot be claimed as a dependent under Section 80DD by another taxpayer in the same financial year.

Conclusion

Section 80U provides essential tax relief for individuals with disabilities, recognising the financial challenges they face. For tax planning in 2025, individuals with disabilities should carefully consider whether the old tax regime, with its deductions, offers better benefits compared to the new regime.