Section 154 Income Tax Act 2025: Who Can Claim Disability Deduction?

Section 154 of the Income-tax Act, 2025 grants a fixed deduction to eligible resident individuals certified as persons with disability or severe disability. This guide explains the deduction, certification requirements and how it is claimed.

Applicable law: Income-tax Act, 2025, section 154, effective from 1 April 2026. This is a deduction from total income, not a tax rebate. It corresponds broadly to section 80U of the Income-tax Act, 1961; do not confuse it with section 154 of the 1961 Act concerning rectification of mistakes.
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How much deduction is available under section 154?

Under section 154(1), a resident individual who is certified by a medical authority at any time during the tax year may claim the following fixed amounts:

Certified statusDeduction
Person with disabilityRs. 75,000
Person with severe disabilityRs. 1,25,000

The deduction is a statutory fixed amount; section 154 does not require the taxpayer to establish expenditure equal to that amount.

Who is eligible?

Section 154 applies to an individual resident in India who is certified by a medical authority as a person with disability or severe disability during the relevant tax year. The provision does not grant this deduction to a non-resident individual or to an HUF in its own name.

The deduction relates to the taxpayer's own disability. Section 127 separately addresses eligible expenditure for a dependant with disability, subject to its own requirements.

What documents and conditions apply under section 154(2)?

  1. Medical certificate: The individual must furnish a copy of the certificate issued by the medical authority.
  2. Reassessment and expiry: If the certificate requires reassessment after a stipulated period, no deduction is allowed for a tax year following the tax year in which it expires unless a new certificate is obtained and furnished.
  3. Return filing: The certificate must be furnished in the prescribed form and manner along with the return of income under section 263 for the tax year of claim.
Practical point: Check the prescribed certificate form, the validity date and the filing requirements applicable to the relevant tax year before submitting the return. A certificate that requires renewal should not be treated as indefinitely valid.

Relevant statutory definitions - section 154(3)

Section 154(3) adopts the meanings of disability, medical authority, person with disability and person with severe disability from section 127 of the Income-tax Act, 2025. These terms must therefore be interpreted using section 127 rather than an informal description of a medical condition.

Disability: The qualifying disability as defined for the purposes of section 127, read with the applicable disability legislation and certification framework.
Medical authority: The authority competent to certify disability within the statutory definition adopted by section 127.
Person with disability: A person meeting the statutory definition and certification criteria referred to in section 127.
Person with severe disability: A person meeting the distinct, more stringent statutory definition referred to in section 127, eligible for the higher fixed deduction.

For the precise legal thresholds and incorporated definitions, consult the text of section 127 on the Income Tax Department website and the prescribed certificate requirements.

Illustrative examples

Example 1: Certified disability

A resident individual holding the required valid certificate as a person with disability may claim Rs. 75,000, subject to section 154(2), even if actual disability-related expenditure is lower.

Example 2: Certified severe disability

A resident individual certified as a person with severe disability may claim Rs. 1,25,000, subject to the prescribed certificate and return-filing requirements.

Example 3: Certificate expires

If a certificate specifies reassessment and expires in a particular tax year, the deduction for a subsequent tax year requires a new certificate obtained and furnished in accordance with section 154(2).

Frequently asked questions

Is the deduction based on actual medical expenses?

No. Section 154 specifies a fixed deduction based on the certified category, subject to the statutory conditions.

Can a non-resident individual claim section 154?

No. The provision expressly requires the individual to be resident in India.

Is section 154 the same as section 80U?

Section 154 of the 2025 Act broadly carries forward the disability deduction under section 80U of the 1961 Act. Always apply the statute governing the relevant tax year.

Does section 154 cover disability of a dependant?

No. Section 154 concerns the claimant's own disability. See section 127 for the separate deduction relating to a dependant with disability.

Does this deduction apply automatically under every tax regime?

No. The availability of Chapter VIII deductions must also be checked against the tax regime applicable to the individual, including any restrictions under section 202. The existence of section 154 alone does not establish availability under every regime.

Official law and further reading

Official Section 154Income-tax Act 2025 (amended)Income Tax e-Filing

Last reviewed: 10 November 2026. This article is general legal information; apply the law and rules applicable to the relevant tax year.