Raising the limit of deduction under Section 80U for persons with disability and severe disability

The existing provisions of section 80U, inter alia, provide for a deduction to an individual, being a resident, who, at any time during the previous year, is certified by the medical authority to be a person with disability (as defined under the said section).

The said section provides for a deduction of fifty thousand rupees if the person is suffering from disability and one lakh rupees if the person is suffering from severe disability (as defined under the said section).

The limits under  section 80U in respect of a person with disability were fixed at fifty thousand rupees by Finance Act, 2003. Further, the limit under section 80U in respect of a person with severe disability was last enhanced from seventy five thousand rupees to one lakh rupees by Finance (No.2) Act, 2009.

In view of the rising cost of medical care and special needs of a disabled person, it is proposed to amend  section 80U so as to raise the limit of deduction in respect of a person with disability from fifty thousand rupees to seventy five thousand rupees.

It is further proposed to amend the section so as to raise the limit of deduction in respect of a person with severe disability from one lakh rupees to one hundred and twenty five thousand rupees.

These amendments will take effect from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016-17 and subsequent assessment years.

NOTE ON RELEVANT CLAUSES  OF FINANCE BILL 2015

Clause 23 of the Bill, seeks to amend section 80U of the Income-tax Act relating to deduction in case of a person with disability.

The existing provisions of section 80U, inter alia, provide for a deduction to an individual, being a resident, who, at any time during the previous year, is certified by the medical authority to be a person with disability.

The section provides for a deduction of fifty thousand rupees if the person is suffering from disability and one lakh rupees if the person is suffering from severe disability.

It is proposed to amend the said section so as to raise the limit of deduction for a person with disability from fifty thousand rupees to seventy-five thousand rupees.

It is further proposed to amend the said section so as to raise the limit of deduction for a person with severe disability from one lakh rupees to one hundred and twenty-five thousand rupees.

These amendments will take effect from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016-17 and subsequent assessment years.

EXTRACT OF RELEVANT CLAUSES FROM FINANCE BILL 2015

23. Amendment of section 80U.

In section 80U of the Income-tax Act, with effect from the 1st day of April, 2016, for sub-section (1), the following sub-section shall be substituted, namely:—

“(1) In computing the total income of an individual, being a resident, who, at any time during the previous year, is certified by the medical authority to be a person with disability, there shall be allowed a deduction of a sum of seventy-five thousand rupees:

Provided that where such individual is a person with severe disability, the provisions of this sub-section shall have effect as if for the words “seventy-five thousand rupees”, the words “one hundred and twenty-five thousand rupees” had been substituted.”

( Compiled by Taxguru Team)

Budget, Budget 2015-16,

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Tags : Budget (1439) Budget 2015-16 (272) Income Tax Deductions (416) Section 80U (11)

16 responses to “Budget 2015- Section 80U deduction Limit Raised”

  1. RAMESH AGARWAL says:

    AM78 YR OLD SUFFERING FROM STROKE SINCE 1999HEMIPLIGIA,NOW MY LEFT HAND ANDLEFT FOOT,LEFT EAR AND RIGHT EYE ARE NON-FUNCTIONALM,RIGHT EYE TOO HAS LOW VISION.civil SURGEON ludhiana CERTIFIED MY DISABILITY AS MORE THAN 50^ IS IT CORRECT.,KINDLY CLARIFY.

  2. siva kumar desai says:

    Hai sir This is siva kumar desai ,am a disable person with 65%.in financial year 2015-16 my tax amount was around 7000 above.
    now a want to submit it returns for refund this amount under 80U.
    what is the procedure for that What proof is required to avail this exemption under 80u. Please help me.

  3. BODH RAJ says:

    SIR PL SEND NOTIFICATION COPY OF THE SAME THANKS REGARDS

  4. Sahil Arora says:

    Following sub-section (1) shall be substituted for the existing sub-section (1) of section 80U by the Finance Act, 2015, w.e.f. 1-4-2016 :
    (1) In computing the total income of an individual, being a resident, who, at any time during the previous year, is certified by the medical authority to be a person with disability, there shall be allowed a deduction of a sum of seventy-five thousand rupees:
    Provided that where such individual is a person with severe disability, the provisions of this sub-section shall have effect as if for the words “seventy-five thousand rupees”, the words “one hundred and twenty-five thousand rupees” had been substituted.

  5. Avinash GADRE says:

    pls. send me a copy of notification on my above email id for the change of deduction 80u from 50000/- to 75000/-

  6. Bharat says:

    To whom does the deduction money go to. In case of pf deduction it goes to epfo, insurance it goes to insurance company, so under 80u who takes the custody of money ?

  7. kameswara rao says:

    Sir, During my service period I did claim 80U (Rs.40,000) from my salary. Now I am senior citizen 73 years. can I claim the same benefit now also? If I want to claim the same benefit, how and what is the procedure?

  8. DESHPANDE GAJANAN says:

    I would like to recive a mail from you if the proposed rise takes place in 80 U & 80DD

  9. DESHPANDE GAJANAN says:

    sir, if a physically challenged employee has a physically challenged person as his dependent can he/she avail both 80U as well as 80 DD SECTIONS?
    i.e. if i am a handicapped person with 60% disability I might get deduction of 50,000/- ( 75,000/- proposed) but can I avail deduction of 100,000/- for my handicapped wife who is dependent on myself .
    in short can I apply for both 80u & 80DD simultaneously ?

  10. rajinder gautam says:

    not reply to responses but i have another question. What proof is required to avail this exemption? My wife has disability of hearing , hearing loss is more than 50 % .I understand that 80% of 60 db is considered severe hearing loss which she has. To whom should I approach to certify this?

  11. CA. Nuba says:

    I think this deduction will be applicable from A.Y. 2017-18 and not from A.Y. 2016-17 as clearly mentioned in budget that it will be effective from 1.4.2016 i.e. from the F.Y. 2016-17

  12. Antu Mandal says:

    I am a beneficiary of sec 80(u). can I avail the extra deduction in coming assessment year 2016-17? or not. please clarify.

  13. jitendra singare says:

    present limit is not sufficient i t act section u/s 80 u the rising of
    inflation and high increase in cost of medical facilities government revises basic exemption limit every year but section 80 u have not been review since last ten years in this budget government increase limit rs 25000/- is not sufficient
    we request to hon’ble finance minister to review the above sections
    and increase limit 200000/ & 300000/-respectively
    regards
    jitendra singare
    email id – singarejitendra@gmail.com

    • BHUPINDER SINGH says:

      yes sir i agree with you,because normal person can increase his profits ,while handicapped persons have to work hard for earnings, we all should stand and raise our voice to finance ministry to review and increase the limits.

      thanks
      bhupinder singh wadhawan
      Email:bhupinderkabir@gmail.com

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