950. Employers authorised to give deduction of allowance under section 80U from salary income while deducting tax at  source on production of certificate issued by Income-tax Officer

1. Section 80U authorises deduction of Rs. 5,000 from the income of a resident individual who, at the end of the previous year, is either totally blind or is subject to or suffers from a permanent physical disability (other than blindness) which has the effect of reducing substantially his capacity to engage in a gainful employment or occupation.

2. The deduction of Rs. 5,000 is to be allowed to such a resident individual by the Income-tax Officer on production, in respect of the first assessment year for which deduction is claimed (a) in the case of a totally blind person, a certificate from a regis­tered medical practitioner being an oculist; and (b) in the case of a permanent disabled person, a certificate from a registered­  medical practitioner as to the permanent physical disability referred to in clause (ii) of section 80U.

3. In order to avoid any inconvenience to such handicapped per­sons, the Board have been considering the question of authorising the employers to take into account this deduction while working out the tax to be deducted at source in case they derive income assessable under the head “Salaries”.

4. It has been decided that an employer would give a deduction of Rs. 5,000 from the income assessable under the head “Salaries” while deducting the tax at source thereon in any financial year on the production of a certificate. Such certificate will be issued by the Income-tax Officer in the name of the employer on a request made by the resident individual entitled to this deduction in the course of his assessment for the first assessment year or later. The certificate will be issued on completing the first year’s assessment if such an individual is held entitled to the deduction of Rs. 5,000  under section 80U.

5. A certificate once issued will continue to be in force till it is withdrawn by the Income-tax Officer or till the resident individual leaves the employment of the employer in whose favour the certificate is issued.

Circular: No. 272 [F. No. 275/16/80-IT(B)], dated 27-5-1980.

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March 2021