Sandeep Kanoi

CA Sandeep KanoiDeduction Under Section 80U of Income Tax Act, 1961 for disabled persons 

The Income Tax Act, 1961 provides deduction u/s. 80 in pursuance of which an individual (Indian citizen and foreign national) who is resident of India, and who suffers from not less than 40 per cent of any disability is eligible for deduction to the extent of Rs. 50,000/- and in case of severe disability to the extent of Rs. 100,000/-.

Budget 2015 proposed to amend  section 80U  to raise  limit of deduction in respect of a person with disability from Rs. 50,000/- to Rs. 75,000 and for person with severe disability from one lakh rupees to one hundred and twenty five thousand rupees.Read more-Budget 2015- Section 80U deduction Limit Raised

For availing deduction u/s. 80U, the assessee needs to fulfill certain legal formalities like he has to obtain a certificate from medical authority constituted by either the Central or the State Government, along with the Return of Income for the year for which the deduction is claimed. The intricate details of Section 80U is explained below in question answer form.

Q.      What is the main difference between Deduction u/s. 80U & Section 80DD?

80DD deduction is in case of the dependent of the employee whereas 80U deduction is in case of the employee himself.

Q.  Do deduction amount U/s. 80U dependent on amount of Expenditure?

This deduction amount is a lump-sum one, irrespective of how much you spend on medical treatment.

Deduction could be claimed even for the year in which the certificate expires. Beyond this year, no deduction could be obtained till the certificate is renewed or a new one is obtained.

Q.      Deduction u/s. 80U is allowed to whom?

Ans.   Deduction u/s. 80U is allowed to any person being a resident (Indian citizen or foreign national), who, at any time during the previous year, is certified by the medical authority to be a person with disability or severe disability.

Q.      What Documents are required to claim deduction Under Section 80U?

To avail a deduction under Section 80U, no bills or receipts are required. What is required is a valid certificate from a medical authority certifying the disability. Separate forms need to be filled for mental illnesses and all other disabilities. For illnesses such as autism or cerebral palsy form number 10-IA additionally needs to be filled.

Q. Which are the medical Authorities who can certify Under Section 80U?

The medical authorities who are deemed to certify are:

-A Neurologist with an MD in Neurology.

-For children, a Paediatric Neurologist having an equivalent degree.

-A Civil Surgeon or Chief Medical Officer (CMO) of a government hospital.

Q.      What is by “Disability”?

Ans.   “Person with disability” means a person suffering from not less than forty per cent of any disability as certified by a medical authority;

The disabilities are those which are specified in “The Persons with Disability (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995”.

“Disability” means-

(I) Blindness refers to a condition where a person suffers from any of the following conditions, namely:-

(i) Total absence of sight. or

(ii) Visual acuity not exceeding 6160 or 201200 (snellen) in the better eye with correcting lenses; or

(iii) Limitation of the field of vision subtending an angle of 20 degree or worse;

(II)  Low vision – “Person with low vision” means a person with impairment of visual functioning even after treatment or standard refractive correction but who uses or is potentially capable of using vision for the planning or execution of a task with appropriate assistive device;

(III) Leprosy-cured- “Leprosy cured person” means any person who has been cured of leprosy but is suffering from-

(i) Loss of sensation in hands or feet as well as loss of sensation and paresis in the eye and eye-lid but with no manifest deformity;

(ii) Manifest deformity and paresis; but having sufficient mobility in their hands and feet to enable them to engage in normal economic activity;

(iii) Extreme physical deformity as well as advanced age which prevents him from undertaking any gainful occupation, and the expression “leprosy cured” shall be construed accordingly;

(IV) Hearing impairment- Hearing impairment” means loss of sixty decibels or more in the better ear in the conversational range of’ frequencies;

(V) Loco motor disability- “Loco motor disability” means disability of the bones, joints muscles leading to substantial restriction of the movement of the limbs or any form of cerebral palsy,

(VI) Mental retardation- “Mental retardation” means a condition of arrested or incomplete development of mind of a person which is specially characterized by sub normality of intelligence;

(VII) Mental illness– “Mental illness” means any mental disorder other than mental retardation;

Q.      What is by “Severe Disability”?

Ans.   Severe Disability is described as a person with eighty per cent or more of one or more aforementioned disabilities.

The benefit of deduction under this section has also been extended to persons suffering from autism, cerebral palsy and multiple disabilities.

Q.      What is meant by “medical authority”?

Ans.   Medical Authority means any hospital or institution specified in Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 by notification by the appropriate Government;

Q.      What is meant by “appropriate government”?

Ans.   “Appropriate Government” means,

i.  the Central Government in relation to the Central Government or any establishment wholly or substantially financed by that Government, or a Cantonment Board constituted under the Cantonment Act, 1924, the Central Government;

ii.  the State Government in relation to a State Government or any establishment wholly or substantially financed by that Government, or any local authority, other than a Cantonment Board,;

iii.   the Central Government in respect of the Central Coordination Committee and the Central Executive Committee,;

iv.   the State Government in respect of the State Coordination Committee and the State Executive Committee,;

Q.      What is the amount of deduction available under section 80U?

Ans.   For normal disability, assessee can claim deduction of Rs. 50,000 while assessee with Severe Disability can claim deduction of Rs.100,000/-.

Q.      What is the procedure Involved to claim deduction under this section?

Ans.    The assessee claiming a deduction under this section shall furnish a copy of the certificate issued by the medical authority in the form and manner, as may be prescribed, along with the return of income under section 139, in respect of the assessment year for which the deduction is claimed.

Where the condition of disability requires reassessment, a fresh certificate from the medical authority shall have to be obtained after the expiry of the period mentioned on the original certificate in order to continue to claim the deduction.

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