PROSPERR.IO

Managing disability comes with financial challenges beyond medical expenses. Recognizing this reality, India's Income Tax Act provides two specific provisions to reduce the tax burden on individuals and families dealing with disability: Section 80DD and Section 80U.

These sections offer fixed tax deductions regardless of actual expenses incurred, providing meaningful relief. Understanding which section applies, how much can be claimed, and what documentation is required becomes essential for disability-related tax planning.

This guide breaks down both provisions completely from eligibility to the claiming process.

Understanding the Two Sections: 80DD vs 80U

The first crucial distinction: these sections serve different beneficiaries.

Section 80U is claimed by individuals with disabilities for themselves. If someone has a certified disability, they claim this deduction in their own income tax return.

Section 80DD is claimed by individuals or Hindu Undivided Families (HUFs) who have dependents with disabilities. The taxpayer incurs expenses or makes payments for the disabled dependent and claims the deduction.

This separation prevents confusion: one section for self, another for dependents. The deduction amounts are identical, but who claims them differs fundamentally.

Critical rule: Both sections cannot be claimed for the same disabled person. If a person with disability claims Section 80U for themselves, their family member cannot claim Section 80DD for that same person. It's one or the other, never both.

Deduction Amounts: Fixed and Clear

Unlike provisions where actual expenditure determines the deduction, Sections 80DD and 80U offer fixed amounts based solely on disability severity:

These are fixed deductions. Whether actual medical expenses are ₹10,000 or ₹10 lakh, the deduction remains the same. The law recognizes that disability creates ongoing financial burden beyond just medical bills—transportation, special equipment, caregiving, lost income opportunities.

This approach simplifies claiming significantly. No need to maintain detailed expense records. The disability certificate suffices.

Who Qualifies as a Dependent Under Section 80DD?

For an individual claiming Section 80DD, "dependent" has specific meaning:

Dependents include:

• Spouse
• Children (including adult children)
• Parents
• Brothers and sisters

For HUF claiming Section 80DD:

• Any member of the HUF

The dependent must be wholly or mainly dependent on the taxpayer for their support. This dependency interpretation remains broad—financial, physical, or emotional support qualifies.

Age doesn't matter: A 45-year-old with disability can be claimed as a dependent by their parent if the parent provides support. There's no upper age limit on dependency for disability purposes.

Eligibility Criteria: What Must Be Met

For Section 80U (Self):

1. The taxpayer must be a resident individual
2. Must have a certified disability of at least 40%
3. Disability must be certified by prescribed medical authority
4. Certificate in Form 10-IA required

For Section 80DD (Dependent):

1. The taxpayer must be a resident individual or HUF
2. Must have a dependent with certified disability of at least 40%
3. Dependent's disability certified by prescribed medical authority in Form 10-IA
4. Must have either:

• Incurred expenditure for treatment, nursing, training, or rehabilitation of the dependent, OR
• Deposited amount under approved scheme (LIC or other insurer) for dependent's maintenance

Residential status matters: Non-Resident Indians (NRIs) cannot claim either deduction. Residency is determined by standard Income Tax Act rules typically 182 days in India during the financial year, with certain exceptions.

Types of Disabilities Covered

Both sections cover identical disabilities, defined under the Persons with Disabilities Act, 1995 and National Trust Act, 1999:

Physical disabilities:

• Blindness and low vision
• Hearing impairment
• Locomotor disability (affecting movement)
• Leprosy cured

Intellectual/mental disabilities:

• Autism
• Cerebral palsy
• Mental retardation/intellectual disability
• Mental illness

Multiple disabilities: When two or more disabilities exist simultaneously, and the combined effect meets the severity threshold.

The disability percentage determines whether someone qualifies (minimum 40%) and which deduction amount applies (40-79% vs 80%+).

Form 10-IA: The Essential Certificate

This medical certificate is mandatory for claiming either deduction. It must be issued by prescribed medical authorities:

Who can certify:

• Civil Surgeon or Chief Medical Officer of a government hospital
• Neurologist with MD degree in Neurology
• Pediatric Neurologist (for children)
• For specific disabilities, specialized doctors as defined in the rules

What Form 10-IA certifies:

• Type of disability
• Percentage of disability
• Whether it's permanent or temporary
• If temporary, the validity period

Validity considerations: If disability is permanent, the certificate typically doesn't need renewal. For temporary disabilities or those that may improve with treatment, the certificate specifies validity period, and renewal is required when it expires.

Can a deduction be claimed with an expired certificate? Yes, for the current year if the certificate was valid when issued. However, for subsequent years, a renewed certificate is needed if the disability was certified as temporary.

How the Deduction Works in Practice

Both deductions are claimed under Chapter VI-A of the Income Tax Act. They reduce Gross Total Income before calculating tax.

Calculation example:

Gross Total Income: ₹8,00,000 Other deductions (80C, 80D, etc.): ₹1,50,000 Section 80U deduction: ₹75,000 (40-79% disability)

Total deductions: ₹2,25,000 Taxable Income: ₹5,75,000

The ₹75,000 deduction directly reduces taxable income, resulting in tax savings based on the applicable slab rate.

In the 30% tax bracket: ₹75,000 deduction saves ₹22,500 in tax (plus cess) In the 20% tax bracket: Same deduction saves ₹15,000 in tax In the 5%

tax bracket: Saves ₹3,750 in tax

The actual tax benefit varies by income level, but the deduction amount remains fixed.

Availability Under New Tax Regime

This is critical for FY 2025-26 onwards. Previously, most deductions under Chapter VI-A (including 80DD and 80U) were not available under the new tax regime introduced via Section 115 BAC.

Major change from AY 2025-26: Both Section 80DD and 80U deductions are now available under the new tax regime as well.

This means taxpayers can choose the new regime (with lower tax rates) and still claim disability deductions. This change significantly improves the value proposition of the new regime for disabled individuals and their caregivers.

Can Both Sections Be Claimed in One Return?

Yes, but only if they relate to different persons.

Scenario: A person has their own disability (40-79%) and also supports a parent with severe disability (80%+).

They can claim:

• Section 80U for self: ₹75,000
• Section 80DD for parent: ₹1,25,000
• Total deduction: ₹2,00,000

This is permissible because the two deductions are for different individuals. The restriction only prevents claiming both sections for the same person.

Common Scenarios and Applications

Scenario 1: An individual with 60% hearing impairment, earning ₹6 lakh annually.

Application: Claims Section 80U for ₹75,000. No need to show medical bills. Just maintain Form 10-IA certificate. Deduction reduces taxable income from ₹6 lakh to whatever remains after all deductions.

Scenario 2: Parents of a child with autism (85% severe disability).

Application: Either parent (or HUF if applicable) can claim Section 80DD for ₹1,25,000. They must have incurred some expenditure—therapy, special education, medical care—or deposited amount in an approved scheme. The deduction is fixed regardless of actual expenditure amount.

Scenario 3: Adult supporting an elderly parent with severe locomotor disability.

Application: Claims Section 80DD for ₹1,25,000 as the parent is a dependent. Parent cannot separately claim Section 80U. Only one deduction allowed per disabled person.

Documentation and Filing Requirements

To claim Section 80U:

• Form 10-IA medical certificate
• No proof of expenses required
• Enter deduction amount in ITR under Section 80U

To claim Section 80DD:

• Form 10-IA for the dependent
• Some evidence of expenditure or payment (medical bills, therapy receipts, insurance premium proof for approved schemes)
• Enter deduction amount in ITR under Section 80DD

Important: While actual bills aren't required to determine deduction amount (since it's fixed), having documentation of some expenditure strengthens the claim that the dependent's disability necessitated financial support.

The ITR form has specific fields for these deductions under Chapter VI-A. Enter the applicable amount based on disability severity.

Comparison Table: Section 80DD vs 80U

Conclusion

Sections 80DD and 80U provide meaningful tax relief for individuals and families managing disability. The fixed-deduction structure offers simplicity and certainty in tax planning.

Core principles:

• Section 80U: claimed by disabled individual for themselves
• Section 80DD: claimed for disabled dependents
• Both require Form 10-IA certification
• Deduction amounts are fixed, not expense-based
• Both now available under new tax regime
• Both deductions can be claimed if for different individuals
• Residential status mandatory

These deductions represent legitimate tax savings that acknowledge the additional financial burdens disability creates. Ensure proper certification, maintain Form 10-IA validity, and claim these deductions annually.

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Frequently Asked Questions

Q1: If someone has multiple disabilities totaling 85% severity, which deduction amount applies?

If the combined disability percentage is 80% or more, the higher deduction of ₹1,25,000 applies. The medical authority issuing Form 10-IA will certify whether it's a "person with disability" (40-79%) or "person with severe disability" (80%+) based on the combined assessment. Multiple disabilities are specifically recognized under the law, and the percentages can be cumulative depending on how they affect overall functioning. The certificate will clearly state which category applies.

Q2: Can parents share the Section 80DD deduction for the same disabled child—father claims ₹62,500 and mother claims ₹62,500?

No. The deduction is a fixed amount that only one person can claim in full. It cannot be split between two taxpayers. Either the father claims the full ₹75,000 (or ₹1,25,000 if severe disability), or the mother does, or if they're part of an HUF, the HUF can claim it. Whoever claims must have incurred the expenditure or made payments for the dependent. If both parents incur expenses, they should decide who claims the deduction, but it goes entirely to one person's return.

Q3: Someone claimed Section 80DD for a parent last year. This year, the parent started earning enough to file their own return. Can the parent now claim Section 80U instead?

Yes, but with the critical restriction: if the parent claims Section 80U for themselves in any given financial year, the child cannot claim Section 80DD for that parent in the same year. One cancels out the other. The parent and child need to decide who benefits more from the deduction based on their respective income levels and tax brackets. Often, whoever is in the higher tax bracket should claim it for maximum tax savings. But only one deduction is allowed per disabled person per year.

Q4: Is there a maximum number of dependents for whom Section 80DD can be claimed?

The law doesn't explicitly cap the number of dependents. If someone has multiple qualifying dependents—say, one disabled child and one disabled parent—technically they could claim Section 80DD separately for each, getting ₹75,000 or ₹1,25,000 per dependent based on severity. However, each claim requires proper Form 10-IA certification and evidence of expenditure for that specific dependent. Practically, this situation is less common, but legally permissible.

Q5: If disability percentage drops from 82% to 65% upon reassessment, what happens to the deduction going forward?

The deduction amount adjusts based on current certified disability level. If a new Form 10-IA certificate shows disability reduced to 65%, the deduction changes from ₹1,25,000 (severe disability) to ₹75,000 (regular disability) starting from the year that certificate is issued. Conversely, if disability worsens and crosses 80%, the higher deduction becomes available. The certificate's disability percentage determines the deduction amount for that year. Always use the most current, valid certificate.