This was Section 80U under the Income-tax Act 1961. See the mapping
Chapter VIII: Deductions
Section 154, Income-tax Act 2025: Deduction in case of a person with disability
Plain-English summary
This is the new home of the disability deduction everyone knew as Section 80U. A resident individual who is certified with a disability gets a flat deduction from income: ₹75,000 where the disability is 40% or more, and ₹1,25,000 where it is severe, meaning 80% or more. Flat means flat. The amount does not depend on what you spent, and you attach no bills, because the section rewards a certified status, not an expense. It is an old-regime deduction only, gone on the default new regime. One document carries the claim: a certificate from a prescribed medical authority, furnished in the given form with your return. Only the section number changed from 80U; the amounts and the rules carried over intact.
What changed when Section 80U became Section 154?
Only the number. The two flat amounts, the certificate rule and the old-regime-only limit all carried over from Section 80U of the 1961 Act. Section 154 sits in Chapter VIII of the 2025 Act, in the run of provisions the Act labels "other deductions", a few doors down from the health and education-loan deductions.
One piece of drafting is worth knowing. Section 154 does not repeat the definitions of what a disability is, who a medical authority is, or where the 40% and 80% lines fall. It borrows all of them from Section 127, the deduction for maintaining a dependant with a disability (the old Section 80DD). So the two provisions read from one shared dictionary, and a change to those meanings would move both at once.
Successor section number cross-checked against published copies of the enacted Act.†
Who can claim it, and how much?
Resident individuals only, and only for their own disability. A non-resident gets nothing here even if certified in India, and residence is tested for the tax year under Section 6. A Hindu Undivided Family, a firm or a company cannot claim Section 154 at all; an HUF supporting a member with a disability looks to Section 127 instead.
The amount is a fixed slab, set by the certified level of disability, not by any spending:
- A disability certified at 40% or more (but under 80%): a flat ₹75,000, whatever your actual costs for the year.
- A severe disability, meaning 80% or more of one or more disabilities: a flat ₹1,25,000.
- The figure never moves with money. Spend ₹5,000 or ₹5,00,000 on your condition in the year and the deduction is identical, because Section 154 asks for a certificate, not receipts.
The deduction reduces your total income; the cash it saves is that income times your slab rate, so ₹1,25,000 is worth more in a 30% slab than in a 5% one.
Which disabilities qualify, and what counts as severe?
The list is not a new one written for the tax law. Section 127, which Section 154 borrows from, points to two disability statutes for its meanings: the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act 1995 and the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act 1999. Between them they cover:
- Blindness and low vision
- Leprosy-cured
- Hearing impairment
- Locomotor disability
- Intellectual disability (the statutes' term is mental retardation)
- Mental illness
- Autism, cerebral palsy and multiple disabilities (from the National Trust Act)
| Person with disability | Person with severe disability | |
|---|---|---|
| Certified level | 40% or more, under 80% | 80% or more |
| Flat deduction | ₹75,000 | ₹1,25,000 |
| Also reaches | Any one of the listed conditions | Severe autism, cerebral palsy or multiple disabilities under the National Trust Act |
The 40% and 80% thresholds are the statutory lines carried in from the 1995 Act framework; the certificate states your percentage.
Why the deduction ignores what you spent
Section 154 is a status deduction, not an expense deduction. The certificate establishes the status, and the flat amount follows automatically. This is the sharp line between it and almost every other deduction in Chapter VIII: the Section 123 basket (old 80C) needs investments, Section 126 (old 80D) needs health premiums, Section 128 (old 80DDB) needs bills for treating a specified disease. For your own disability, you itemise nothing.
It is also the line between Section 154 and its close sibling Section 127 (old 80DD). Section 127 pays the same flat ₹75,000 or ₹1,25,000, but only to a relative who has actually incurred some spending on a dependant's care, training or rehabilitation, or paid into an approved LIC or insurer scheme for them. Section 154 has no such gate. The certificate alone does the work.
The practical upshot: budget your care spending on its own merits. The tax break does not rise if you spend more in a hard year, and does not fall if a good year costs you little.
Section 154 vs Section 127: can you claim both?
No. One person with a disability supports exactly one of these two deductions in a tax year, never both. The Act says so in as many words: Section 127(8) provides that a "dependant" cannot include a person who has already claimed Section 154 for himself. So the family chooses a single route.
Either the person with the disability claims Section 154 on their own return (flat amount, no bills, no spending needed), or a resident relative who maintains them claims Section 127 (same flat amount, but they must have spent something on the person's care or paid into an approved scheme) treating them as a dependant. Whichever return the deduction is worth more on, once. The third worked example below shows how that choice actually falls.
Section 128 (the old 80DDB, for treating specified diseases) is a different deduction and is not blocked: a person can claim Section 154 for their disability and, separately, Section 128 for a qualifying disease if both conditions are met.
Is Section 154 available under the new regime?
No. Like the rest of the Chapter VIII deductions, apart from a short survivor list led by the salary standard deduction and the employer's NPS contribution, Section 154 works only if you opt out of the default new regime into the old regime under Section 202. On the new regime the disability deduction is unavailable.
For a disabled taxpayer that is a real trade to weigh, not a formality. The new regime's lower slabs and its rebate, which zeroes tax up to ₹12 lakh of income, sit on one side; the old regime plus this flat ₹75,000 or ₹1,25,000 sits on the other. At many middle incomes the new regime still wins even after giving up the deduction, because the rebate already takes the bill to zero. The strategy section runs the crossover.
How do you claim it, and what does the certificate need?
One document does the work: the disability certificate from a prescribed medical authority. You do not post it to the department. You furnish it in the prescribed form and manner along with your return of income under Section 263 (the return-filing section, the old Section 139), for the year you claim the deduction.
For most conditions the certificate is the standard one issued by the medical board. For autism, cerebral palsy and multiple disabilities the prescribed form is Form 10-IA.† Salaried claimants should give the certificate details to their employer with Form 12BB so the deduction reflects in monthly TDS instead of waiting for a refund at assessment.
The reassessment trap: if your certificate states that the disability must be reassessed after a set period, the deduction stops for any tax year after the certificate expires, unless you obtain and furnish a fresh certificate. A lapsed certificate is a silently lost deduction, so diarise its expiry.
Should you switch to the old regime just for this deduction?
Start with what the deduction is actually worth, because it only has value on the old regime. Its cash saving is the flat amount times your slab rate, plus 4% cess: the severe-disability ₹1,25,000 saves ₹39,000 at the 30% slab, ₹26,000 at 20%, and ₹6,500 at 5%; the ₹75,000 amount saves ₹23,400, ₹15,600 and ₹3,900 across the same slabs. That is the most the deduction can ever hand back.
Set that against the cost of leaving the new regime. Below ₹12 lakh of total income the new regime's Section 156 rebate already makes tax zero, so opting out to the old regime just to claim Section 154 gains you nothing: you would be swapping a zero bill for a slightly-above-zero one. The deduction starts to earn its keep only above roughly ₹12 lakh to ₹13 lakh of income, and even then usually only when you stack it with other old-regime deductions (a Section 123 basket, health premiums, home-loan interest or HRA) so the pile together beats the new regime's lower rates.
The second planning move is who claims it. Because Section 154 and Section 127 pay the same flat amount, and a nil-income return cannot use a deduction, route it to a taxpayer. If the person with the disability has little or no taxable income of their own, their Section 154 claim is worth ₹0; a working relative claiming Section 127 for them instead turns the same ₹1,25,000 into a real ₹39,000 at the 30% slab. Section 127(8) lets the family pick one, so pick the return where it saves tax.
Worked examples
Own 45% disability, salaried, old regime
Meera is a resident individual certified with a 45% locomotor disability. She is salaried, on the old regime at the 20% slab, and claims Section 154 for herself. Her actual spending on physiotherapy this year was ₹18,000, which the deduction ignores entirely.
| Gross total income (after the standard deduction) | ₹9,00,000 |
| Section 154 flat deduction (40%+ disability) | − ₹75,000 |
| Taxable income | ₹8,25,000 |
| Tax the deduction saves at the 20% slab, with cess | ₹15,600 |
The ₹18,000 she actually spent is irrelevant; the flat ₹75,000 stands on the certificate alone.
Own severe (80%) disability, consultant, 30% slab
Arjun is a resident certified with 80% blindness, which is a severe disability. He runs a consultancy, files on the old regime at the 30% slab, and claims Section 154 with no bills attached.
| Gross total income | ₹22,00,000 |
| Section 154 flat deduction (severe disability) | − ₹1,25,000 |
| Taxable income | ₹20,75,000 |
| Tax the deduction saves at the 30% slab, with cess | ₹39,000 |
A severe-disability certificate is worth ₹39,000 a year at the 30% slab, whether he spent anything on his condition or not.
Routing the deduction: Section 154 or Section 127?
Rohit, 26, has an 80% intellectual disability and no taxable income of his own. His mother, on the old regime at the 30% slab, maintains him and spends on his care. The family can claim Section 154 on Rohit's return or Section 127 on his mother's, never both (Section 127(8)).
| Value of Section 154 on Rohit's nil-income return | ₹0 |
| Section 127 deduction on his mother's return (severe) | ₹1,25,000 |
| Tax his mother saves at the 30% slab, with cess | ₹39,000 |
With Rohit below the taxable threshold, the ₹1,25,000 is worth ₹39,000 only in his mother's hands, so the family claims Section 127, not Section 154.
Read the section as enacted
The statutory text is loaded verbatim from the Gazette copy of the Income-tax Act 2025, never from secondary sources or memory. The CA-checked copy appears here the moment it clears review.
Section 154 FAQs
Is Section 80U the same deduction as Section 154 now?
Yes. From TY 2026-27 the Income-tax Act 2025 renumbers the old Section 80U as Section 154. The substance is unchanged: a flat ₹75,000 for a disability of 40% or more, and ₹1,25,000 for a severe disability of 80% or more, for a resident individual certified by a medical authority.
Do I need bills or receipts to claim Section 154?
No. This is one of the few deductions that ignores your spending. It is flat and status-based: the only document is the disability certificate from a prescribed medical authority, and the amount is the same whatever you actually spent on your condition during the year.
Can I claim the disability deduction under the new tax regime?
No. Section 154 is an old-regime deduction. On the default new regime it is unavailable, so you would have to opt out under Section 202 to claim it. For incomes up to ₹12 lakh the new regime's rebate often makes tax zero anyway, so opting out purely for this deduction can save nothing; run both regimes before switching.
What is the difference between Section 154 (80U) and Section 127 (80DD)?
Section 154 is for your own disability, is flat, and needs no spending. Section 127 is for a dependant's disability, claimed by the resident relative who maintains them, and it needs some qualifying spend on the person's care or a payment into an approved LIC or insurer scheme. Both pay the same flat ₹75,000 or ₹1,25,000, but the same person cannot be the basis of both in one tax year.
Which disabilities qualify, and what makes a disability severe?
The conditions come from the Persons with Disabilities Act 1995 (blindness, low vision, leprosy-cured, hearing impairment, locomotor disability, intellectual disability and mental illness) and the National Trust Act 1999 (autism, cerebral palsy and multiple disabilities). A certified level of 40% or more is a disability, worth ₹75,000; 80% or more is a severe disability, worth ₹1,25,000.
My disability certificate has an expiry date. Does the deduction keep running?
Only until the certificate expires. If it states that your disability must be reassessed after a set period, the deduction stops for any tax year after the certificate lapses, unless you obtain and furnish a fresh certificate. Renew it before it expires so the claim does not silently drop.
Is Form 10-IA always required?
For autism, cerebral palsy and multiple disabilities, yes: the prescribed form is Form 10-IA.† For other disabilities a standard medical-board certificate is enough. Either way you furnish the certificate in the prescribed form with your return; you do not post the paper document to the department.
Can a person with a disability also claim Section 128 (old 80DDB) for treatment?
Yes. Section 128 covers the cost of treating certain specified diseases and is a separate deduction from the disability one. There is no bar on claiming Section 154 for your disability and Section 128 for a qualifying disease in the same year, provided each condition is independently met.