Section 154 — Disabled Person Deduction | ITA 2025

Section 154 — - DEDUCTION IN CASE OF A PERSON WITH DISABILITY

Section 154 is the substantive equivalent of 1961 s. 80U -- the SELF-DISABILITY DEDUCTION (distinct from s. 127 / 1961 s. 80DD which covers DEPENDANT-disability). The deduction recognises increased living costs and reduced earning capacity faced by individuals with disability; it is a FLAT DEDUCTION not tied to actual expenditure -- INR 75,000 (disability) / INR 1,25,000 (severe disability >= 80%). Eligibility: resident individual certified by medical authority. Certificate validity: continuous till expiry stated; renewal required upon expiry. The deduction operates at GTI level (not against specific income head). Sister-provision s. 127 covers disabled DEPENDANT (parent / spouse / sibling / child); the two are NOT mutually exclusive but apply to different fact patterns.

Statutory text — Income-tax Act, 2025

Marginal note -- Deduction in case of a person with disability

(1) An individual, being resident in India, who is certified by a medical a uthority, at any time during the tax year, as a person with disability or person with severe disability, shall be allowed a deduction of ` 75000 or ` 125000, respectively, while computing his total income.

(2) The deduction under sub-section (1) shall be allowed only if all of the following conditions are fulfilled:—

(a) the individual furnishes a copy of the certificate issued by the medical authority;

(b) if the certificate specifies that the disability needs reassessment of its extent after a period stipulated in it, the deduction shall not be allowed for any tax year succeeding the tax year in which the certificate expires, unless a new disability certificate is obtained and furnished; and

(c) the certificate referred to in clauses (a) and (b) of this sub-section is furnished in the form and manner, as may be prescribed, along with the return of income under section 263 for the tax year in which the deduc- tion is claimed.

(3) For the purposes of this section, “disability”, “medical authority”, “person with disability” or “person with severe disability” shall have the same meanings as pro- vided in section 127. CHAPTER IX REBATES AND RELIEFS A.—Rebates and reliefs Rebate to be allowed in computing income-tax. 155. ( 1) In computing income-tax on the total income of an assessee with which he i s chargeable for any tax year, there shall be allowed from income-tax (as computed before allowing the deductions under this Part), subject to the provisions of section 156, the deductions specified therein.

(2) The deduction under section 156, shall not, in any case, exceed income-tax (as computed before allowing the deductions under this Part) on the total income of the assessee with which he is chargeable for any tax year. Rebate of income-tax in case of certain individuals. 156. ( 1) An assessee, being an individual resident in India, shall be entitled to a d eduction of 100% of income-tax payable or ` 12500, whichever is less, from the income-tax (computed before allowing the deduction under this section) chargeable on the total income for any tax year if such total income does not exceed ` 500000.

(2) Where the total income of a resident individual assessee for any tax year is chargeable to tax under section 202(1), then from income-tax (computed before allowing the deduction under this section) following deductions shall be allowed, if—

(a) the income does not exceed twelve lakh rupees, 100% of the income-tax payable or ` 60000, whichever is less;

(b) the total income exceeds twelve lakh rupees and the income-tax payable on such total income exceeds the amount by which the total income is in excess of twelve lakh rupees, an amount equal to the amount by which the income-tax payable on such total income is in excess of the amount by which the total income exceeds twelve lakh rupees.

(3) The deduction under sub-section (2), shall not exceed income-tax payable as per the rates provided in section 202(1). Relief when salary, etc., is paid in arrears or in advance.

Corresponding provision — 1961 regime

INCOME-TAX ACT, 2025	INCOME-TAX ACT, 1961
INCOME-TAX ACT, 2025 -- s. 154	INCOME-TAX ACT, 1961 -- s. 80U
Eligibility -- resident individual with disability certified by medical authority	1961 s. 80U(1)
INR 75,000 standard / INR 1,25,000 severe disability (>=80%)	1961 s. 80U(1) Proviso
Certificate validity / expiry / renewal protocol	1961 s. 80U(2) read with Rule 11A
'Disability' / 'severe disability' / 'medical authority' definitions per RPwD Act 2016 + National Trust Act 1999	1961 s. 80U(4) Explanation [FA 2019 RPwD-aligned]

STATUTORY ARCHITECTURE

ELIGIBLE ASSESSEE: resident individual (not HUF, firm, company, AOP). Non-resident-individual NOT eligible -- the deduction is residence-conditioned. Joint claim by both spouses (each disabled) permitted. DEDUCTION QUANTUM: (i) DISABILITY (40% to <80%): INR 75,000 (FA 2015 enhanced from earlier INR 50,000); (ii) SEVERE DISABILITY (>=80%): INR 1,25,000 (FA 2015 enhanced from earlier INR 1,00,000). FLAT DEDUCTION not tied to actual expenditure -- the policy assumes structural cost-of-living increment due to disability. Distinct from s. 127 (disabled-dependant) and s. 128 (specified-disease medical treatment) which require expenditure proof. DISABILITY DEFINITIONS: aligned with the Rights of Persons with Disabilities Act 2016 (RPwD Act -- 21-disability list including locomotor, hearing, speech, visual, intellectual, mental, autism, cerebral palsy, multiple disabilities, learning disabilities, blood disorders, deaf-blindness etc.) AND the National Trust for the Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act 1999. MEDICAL AUTHORITY: Civil Surgeon / Government-hospital authority specified per Rule 11A; certificate in Form 10-IA (or equivalent post-2025-Rule). CERTIFICATE VALIDITY: continuous till expiry stated on certificate; some categories require renewal (e.g., autism / mental disability re-evaluated periodically); permanent disability typically lifetime.

INTERACTION WITH NEW REGIME

Section 154 deduction is GENERALLY NOT AVAILABLE under simplified-rate regime u/s 202(1) (parallel to 1961 s. 115BAC). However, FA 2024 / FA 2025 have progressively retained certain disability-related deductions under new regime; specifically NPS contribution u/s 124 IS available under new regime, but s. 154 self-disability is NOT. Practitioner: for individuals with disability, model both regimes; if income > INR 12L and substantial s. 124 / s. 127 / s. 128 / s. 129 deductions, old-regime-with-s. 154 often optimal.

CASE LAW / DEPARTMENTAL

(i) CBDT Circular No. 1/2018 -- clarifying disability certificate validity / renewal under post-RPwD Act 2016 framework. (ii) PCIT v. Praveen Kumar Singh (ITAT Delhi) -- 'severe disability' >= 80% threshold strictly applied; certificate categorisation crucial. (iii) Pre-FA 2015 quantum (INR 50K / INR 1L) historic; current FA 2015-onwards quantum stable. (iv) FA 2025 / FA 2026 -- monitor potential inflation-adjustment of quantum to INR 1L / INR 1.5L.

PLANNING NOTES

(i) CERTIFICATE -- obtain Form 10-IA from authorised Government / Civil Surgeon authority; specify disability category and percentage; severe (>=80%) certified separately. (ii) RENEWAL TIMELINE -- diary the certificate expiry; renewal must be in place by return-filing for the year of claim; lapsed certificate disallows deduction. (iii) NEW-REGIME OPT-OUT -- if claiming s. 154, old regime; for individuals with disability earning > INR 12L, run cost-benefit between old-regime-with-s. 154 and new-regime-with-s. 156-rebate. (iv) SISTER PROVISIONS -- s. 127 (disabled dependant) and s. 128 (specified disease medical treatment) MAY be claimed in same return for different fact patterns. (v) JOINT-DISABILITY HOUSEHOLD -- if both spouses disabled, each claims s. 154 in own return. (vi) SECTION 19 PERQUISITE INTERACTION -- employer-provided special equipment / assistive devices to disabled employee may also be exempt under separate rules; cross-check Form 16 Part B.

CROSS-REFERENCES

Section 122 -- GTI / Chapter VIII opening.
Section 127 -- Disabled-dependant deduction (sister provision).
Section 128 -- Specified disease medical treatment.
Section 124 -- NPS contribution (still available under new regime).
Section 202(1) -- New-regime simplified rates.
Section 156 -- Rebate u/s 87A.
Rights of Persons with Disabilities Act 2016 -- 21-disability list.
National Trust Act 1999 -- autism / cerebral palsy / MR / multiple disabilities.
Income-tax Rules, 2026 r. 11A-equivalent -- medical authority / certificate.
Form 10-IA -- disability certificate.
CBDT Circular 1/2018 -- post-RPwD Act clarification.

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