CA Sandeep Kanoi
As per The Persons With Disabilities Act, 1995 “Disability” means-(I) Blindness; (ii) Low vision; (iii) Leprosy-cured; (iv) Hearing impairment; (v) Loco motor disability; (vi) Mental retardation; and (vii) Mental illness (viii) autism (ix) cerebal palsy (x) multiple disability and “Person with disability” means a person suffering from not less than forty per cent. of any disability as certified by a medical authority;
As per Wikipedia Disabilities is an umbrella term, covering impairments, activity limitations, and participation restrictions. An impairment is a problem in body function or structure; an activity limitation is a difficulty encountered by an individual in executing a task or action; while a participation restriction is a problem experienced by an individual in involvement in life situations. Thus, disability is a complex phenomenon, reflecting an interaction between features of a person’s body and features of the society in which he or she lives.
In this article we will discuss the Benefits under the Income Tax and Profession Tax Act Available to Disabled or Handicapped Persons. Income Tax Act Provides Deduction Under Section 80DD, 80DDB and 80U and also provide indirect tax benefit under section 64 of the Income Tax Act. In addition to that In most states in India Profession tax exemption is been extended to Disabled or Handicapped Persons and we will discuss the provisions applicable in state of Maharashtra.
1. Deduction 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. 75,000/- and in case of severe disability to the extent of Rs. 1,25,000/-.
For More Details Please Visit the following Link :- Deduction U/s. 80U for disabled persons
2. Deduction u/s. 80DD for expenses on maintenance/ medical treatment of disabled dependent – Government of India has in order to provide some relief to those who have a dependent with disability or sever disability provided some relief’s from Income tax under section 80DD of the Income Tax Act, 1961. Deduction allowed under this section is Rs. 75,000 if disabled dependant is not suffering from severe disability. Deduction allowed goes up to Rs. 1,25,000 if disabled dependant is a person with severe disability.
Deduction not depend on amount of expenses incurred:- Even if your actual expenses on above mentioned disabled dependent relative is less than amount mentioned above you will be eligible to full deduction.
Read more on Deduction u/s. 80DD – Deduction u/s. 80DD for expenses on medical treatment of disabled dependent
3. Medical treatment of specified ailments under section 80DDB – Deductions of expenses on medical treatment of specified ailments (such as AIDS, cancer and neurological diseases) can be claimed under Section 80DDB. The maximum amount of deduction allowed from gross total income is restricted to Rs 40,000 (which goes up to Rs 60,000 if the age of the person treated is 60 years or more and Rs 80,000 if the age of the person treated is 80 years or more) on condition that no medical reimbursement is received from any insurance company or employer for this amount. In case of reimbursement the amount paid should be reduced by the amount received if any under insurance from an insurer or reimbursed by an employer. However wef A.y 2019-20 the above limit of Rs 60000 and Rs 80000 has been increased to Rs 1,00,000
Read More on Section 80DDB – Deduction under section 80DDB with FAQ
4. Transport allowance Under Section 10(14) Read with Rule 2BB – Employees with visual and orthopaedic disabilities get double the usual tax-exempt transport allowance granted to others. For an employee who is blind or with disability of the lower limbs, the exempted amount is Rs. 3200 per month. Such employees can request their employers to structure their pay so that they get Rs. 3200 a month as transport allowance.
5. NO Clubbing of Income of Disabled Minor with Income of his Parents Under Section 64 – Although there is no direct deduction under section 64 but income generated by minor child who is disable will not be clubbed with the Income of his parents. As the income of the child is not clubbed the child is treated as a separate Individual and can file his independent Income Tax return with all its benefits. An Individual can transfer their revenue generating asset like fix deposits in the name of disable child and the interest earned will not be clubbed with the income of individual but will be assessed separately, which provides significant scope for tax savings. Further the disable child while filing its own return can claim benefit under section 80U.
6. Exemption from payment of Profession Tax under Section 27A of Profession Tax Act, Maharashtra State – Any person suffering from a permanent physical disability (including blindness), being a permanent physical disability specified in the rules made in this behalf by the State Government, which is certified by a physician, a surgeon or an oculist, as the case may be, working in a Government Hospital is exempt from Complete amount of professional tax payable. To Claim Exemption individual shall forward the certificate to employer who will produces the aforesaid certificate before the prescribed authority in respect of the first assessment year for which he claims deduction under the act. Since Profession Tax is a Matter of state government so a disabled person working in as state where profession tax is applicable can check the respective profession tax law of their state to check if profession tax exemption is exist for them or not. In India In most states the Professional tax is exempted for disable person.
Read Below article for Profession Tax Rates Applicable in Maharashtra and also about exemption from Profession tax in Maharashtra to Handicapped Person with more than 40 % disability or parent of a physically disabled or mentally retarded child – New Profession Tax Rates in Maharashtra & Provisions
(Republished with Amendments)