Saturday, 24 August 2013

Physical Disability and Income Tax Exemptions u/s. 80U

Section 80U of the I.T. Act, 1961 allows a deduction to an individual who is resident and who at any time during the previous year is certified by a medical authority to be a person with disability. The deduction under this Section is a sum of Rs 50,000/- in normal cases and if the person is suffering from a severe disability (80% or more) then a sum of Rs. 1,00,000/- is allowable as deductions.
“Person with Disability” for the purpose of section 80U means a person suffering from not less than 40% of any of the disability given below:
i) blindness
ii) low visioniii) leprosy-cured
iv) hearing impairment
v) locomotor disability
vi) mental retardationvii) mental illness
viii) austim
ix) cerebral palsy
x) multiple disability referred to in clauses (a), (c), & (h) of section 2 of the National Trust for welfare of persons with Austim Cerebral Palsy, Mental Retardation & Multiple Disabilities Act-1999.
With above basic provision about the deduction u/s 80U, pointwise reply to your queries are as under:
1. Polio leads to locomotor disability & the disability is well covered within the meaning of the word “person with disability”. The deduction can be considered by DDO while working out the TDS of the employee. [Circular No. 8/2012 [F.NO. 275/192/2012-IT(B)], Dated 05-10-2012 issued by the CBDT]
2. The deduction is admissible U/s 8OU. The amount, as elaborated above, could be either Rs. 50,000/- or Rs. 1,00,000/-.
3. The following documents should be obtained by the DDOs before considering the deduction u/s 80U:
a] A copy of the certificate issued by the medical authority as defined in Rule 11A(1) in the prescribed form as per Rule 11A(2) of the Rules. The deduction should be allowed only after seeing that the Certificate furnished is from the Medical Authority defined in this Rule and the same is in the form as mentioned therein.
b] Further, In cases where the condition of disability is temporary and requires reassessment of its extent after a period stipulated in the aforesaid certificate, no deduction under this section shall be allowed for any subsequent period unless a new certificate is obtained from the medical authority as in 1 above is furnished.

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