Tax returns filing: How differently abled people can claim benefits

Section 80U of the Income Tax Act provides significant benefits to differently abled people

Arun Singh, a visually impaired software engineer, last year found that tax laws provide benefits to differently abled people and their caregivers. By citing deductions under two legal clauses and allowances for assistive devices, Singh saved up to Rs 90,000.

 

A significant tax benefit for disabled persons is provided under Section 80U of the Income Tax Act. The disability can be in the form of blindness, low vision, leprosy-cured, hearing impairment, locomotor disability, “mental retardation”, or mental illness, among others. Section 80DD, another enabling clause, allows family members to claim tax deductions for supporting “disabled dependents”.

 

Eligibility criteria

 

 

To claim a deduction under Section 80U, an individual must meet the following criteria:

 

Must be a resident of India.

 

Have a disability of at least 40 per cent, as certified by a medical authority.

 

Not have claimed a deduction under Section 80DD for the same dependent.

 

“Under Section 80U of the Income Tax Act, a resident individual with a disability can avail a flat deduction of Rs 75,000. For severe disability, the deduction increases to Rs 1,25,000. This deduction is irrespective of the actual expenses incurred, providing a straightforward benefit,” said Swapnil Patni, founder of SPC and a personal finance expert.

 

“Section 80DD allows deductions for families supporting disabled dependents. Expenses incurred for the medical treatment, training, and rehabilitation of a dependent with disabilities qualify for a deduction of Rs 75,000, and for severe disabilities, the limit goes up to Rs 1,25,000. These provisions reflect the government's commitment to supporting the financial wellbeing of disabled individuals and their families,” he said.

 

Manikandan S, a tax Expert at Cleartax, explained how deductions can be claimed under Section 80U. “There is no requirement apart from the certificate certifying the disability from a recognised medical authority in Form 10-IA. There is no need of producing bills for the cost incurred for the pursuance of treatment or such other expenses.

 

“For making a claim under this section, one must submit the medical certificate indicating the disability together with the income tax returns as per Section 139 for the relevant assessment year. In case the disability assessment certificate has expired, one would still be able to claim such deductions in the year in which the certificate expires. However, a fresh certificate would be required from the succeeding year to claim the benefits under 80U,” he said.

 

Who can issue certificates?

 

Disability certificates can be obtained from either a neurologist (in the case of children, a paediatric neurologist with an equivalent degree) or a civil surgeon or chief medical officer in a government hospital.

 

If the disability is temporary and requires reassessment after a certain period, then the certificate’s validity starts from the assessment year relevant to the financial year during which it was issued and ends during the assessment year relevant to the financial year when the certificate expires.

 

Disabled individuals can also benefit from various tax-saving investment options available to all taxpayers, such as:

 

Public Provident Fund (PPF)

 

National Savings Certificate (NSC)

 

Tax-saving Fixed Deposits

 

Equity Linked Savings Scheme (ELSS)

 

These investments fall under Section 80C, which allows for a deduction of up to Rs 1,50,000 from taxable income.