Special Tax Deductions for Disabled Ex-Servicemen & Gallantry Awardees

Disabled ex-servicemen and gallantry awardees can claim major tax deductions and exemptions under Sections 80U, 10(14), and 10(18). Know your full benefits and how to claim them. Read more.

Key Highlights

• Section 80U provides a deduction of 75,000 rupees or 125,000 rupees for veterans with a 40% or higher disability.
• Gallantry award pensions are fully exempt from tax under Section 10(18).
• Defence allowances are tax-free under Section 10(14) and can greatly reduce taxable income.
• Donations to veterans’ welfare receive full deduction under Section 80GGA.
• udChalo’s CA assisted plans simplify filing for defence families.

Section 80U in Depth: Deduction for Disability

What Is Section 80U?

This section provides a flat deduction from taxable income for individuals with certified disabilities of at least 40%. The deduction levels are:

• 75,000 rupees for disability, 40 per cent up to 79 per cent.
• 125,000 rupees for disability of 80 per cent and above, including conditions such as cerebral palsy or autism .

Who Qualifies?

• You must be a resident of India, having lived for at least 182 days in the financial year.
• You must hold a disability certificate in Form 10-IA from an authorised medical authority such as a civil surgeon, neurologist, paediatric neurologist, or Chief Medical Officer .
• You must file under the Old Tax Regime, because 80U is not available in the New Regime .

How to Claim

• Obtain Form 10-IA and include it while filing your ITR.
• No need for medical expense bills or treatment receipts; the medical certificate suffices .
• Ensure renewal of the certificate before its expiry; you can still claim in the year of its expiry.

Why It Is Especially Relevant for Veterans

Disabled ex-servicemen may receive a tax exemption on their disability pension under Section 10(14). Section 80U provides an additional tax-saving layer by reducing taxable income beyond that exemption.

Tax Exemptions under Sections 10(14), 10(18), 10(19), and 10(23AA)

Section 10(14): Tax Free Allowances

Defence service allowances are fully exempt, subject to specified limits :

Additionally:

• Disability pensions are fully exempt under Section 10(14) .
• Gallantry award pensions are fully exempt under Section 10(18) .
• Family pensions paid upon death that occurred during service are exempt under Section 10(19).
• Regimental fund income is exempt under Section 10(23AA) .

Section 10(18): Gallantry Award Pensions

Pensions granted for medals like Param Vir Chakra, Maha Vir Chakra, Vir Chakra, and others are fully exempt from income tax.

Section 80GGA: Donations to Veterans’ Welfare Organisations

Donations made to veteran and defence welfare organisations, such as the National Defence Fund, are eligible for a 100% deduction under Section 80GGA, with no upper limit, and regardless of whether the donor is an individual or an institution.

Side-by-Side Comparison of Major Tax Benefits

Common Jargon Explained

• Resident – A person who resides in India for 182 days or more in a financial year.
• Exemption – Income that is not counted in taxable income.
• Deduction – Reduction from your total taxable income.
• Flat deduction – A fixed deduction amount; receipts are not needed.
• Allowance – Funds provided for a specific purpose tied to a service.
• Form 10-IA – Medical certificate certifying disability.
• Old Tax Regime – The prior tax system allowed exemptions and deductions under various sections.

Dos and Don’ts 

Dos

• Keep Form 10-IA valid by renewing it before it expires.
• Maintain receipts for allowances such as uniform and transport.
• Donate to veteran causes under Section 80GGA to receive full deduction.
• File under the Old Tax Regime to claim these benefits.
• Consider udChalo’s CA-assisted filing for balanced, accurate claims.

Don'ts

• Do not claim Section 80U together with Section 80DD.
• Do not switch to the New Tax Regime if you wish to claim these benefits.
• Do not let your disability certificate expire without renewal.
• Do not lose receipts or supporting documents.
• Do not miss ITR deadlines, which are generally 31 July.

Expert Tips for Defence Families

1. Check your allowances following any transfer or posting change.
2. Use both Section 80U deduction and allowances to maximise tax benefit.
3. Plan donations to veteran causes, since Section 80GGA offers full deduction.
4. Choose the correct ITR form—ITR 1 for salaried income, ITR 2 for pensioners and multiple sources.
5. Let udChalo’s CA-assisted filing ensure that correct claims are made.

How udChalo Can Assist

udChalo’s CA-assisted filing plan is custom-designed for defence families. Here is how it works:

• Expert guidance to claim Sections 80U, 10(14), 10(18), and 80GGA.
• Secure online upload of Form 10-IA and allowance receipts.
• Technical advice on the appropriate ITR form and filing regime.
• Shorten filing time and minimise errors.

Visit udChalo’s tax services page to explore plans. Then select the CA-assisted plan that best fits your needs.

Final Conclusion

• Section 80U provides an assured deduction of 75,000 or 125,000 rupees if you are a disabled ex-serviceman.
• Allowances (Section 10(14)) and exemptions for pensions further reduce taxable income.
• Gallantry, disability, and family pensions are fully exempt under relevant sections.
• Donations to veteran causes are eligible for a complete deduction under Section 80GGA.
• To claim these benefits, you must file under the Old Tax Regime, submit correct documents, and choose the proper ITR form.
• udChalo’s CA assisted tax plan streamlines the process and helps maximise your filing accuracy.

Empower your tax filing and enjoy its benefits with ease. Choose udChalo’s CA-assisted tax filing plan today, upload your documents, and let experts optimise your return.

If you have further questions or need personalised guidance, udChalo is ready to assist you.

FAQs

1. Can I claim both Section 80U deduction and Section 10 allowances together?
Yes. You can claim Section 80U deduction for disability and also claim tax-free allowances under Section 10(14). Those exemptions and deductions apply independently and work together to reduce your total taxable income.

2. What must I do if my 80U certificate expires partway through the year?
You can claim a deduction up to the year the certificate expires. You should renew your certificate before the next financial year ends to continue claiming it. Even in the year of expiry, you can still file taxes and claim the deduction.

3. Can my family claim the 80U benefit on my behalf?
No. The 80U deduction is personal to the individual with the disability and cannot be claimed by family members.

4. Are gallantry award pensions truly tax-free?
Yes. Pension received on account of gallantry awards is fully exempt under Section 10(18), so you do not need to report it as taxable income.

5. Will I need bills for allowances when filing?
Allowances such as uniform, transport, or field allowances do require expense receipts. Other allowances under Section 10(14) are exempt up to prescribed limits.

6. Is Section 80U available under the new tax regime?
No. Section 80U is only valid under the old regime that allows deductions and exemptions. It is not available under the new flat-rate regime.

7. Can I donate and claim under Section 80GGA?
Yes. Donations to veteran welfare funds are fully deductible under Section 80GGA. There is no maximum limit to the amount you can claim.

8. Does family pension qualify for tax exemption?
Yes. Family pension payable after death during service is fully exempt under Section 10(19).

9. Which form should I use to file my returns?
Use ITR 1 if your income is from salary/pensions only and the amount is within permitted limits. Use ITR 2 if you have pension income, rental income, capital gains, or business income.

10. Does udChalo allow fully remote filing?
Yes. uDChalo’s CA-assisted filing lets you submit documents online and manage the entire filing process remotely and securely.