In the previous series, we discussed about Section 80DD and Section 80DDB. Through this blog, I am going to cover another section which provides tax relief in case of a disability.
Section 80U: Deduction in case of a person with Disability
Who is eligible to avail this deduction?
This deduction is available to a Resident Individual, who is suffering from a disability.
Thus deduction under this section is provided in case the individual is himself disabled in contrast to deduction under Section 80DD which is provided in case any of the dependent family members of the individual is disabled.
Amount of deduction allowed to be claimed:
The individual (taxpayer) is allowed a deduction of INR 75,000 (Before the amendment in Budget 2015, the deduction was INR 50,000), if he is certified by a medical authority to be suffering from specified disability.
However, if the individual is suffering from a specified severe disability, he is allowed a deduction of INR 125,000 (Before the amendment in Budget 2015, the deduction was INR 100,000) instead of INR 75,000.
It is pertinent to note that deduction amount is lump sum, irrespective of how much is spent on the medical treatment by the individual.
What is a Disability?
The disabilities are those which are specified in “The Persons with Disability (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995” and includes “autism”, “cerebral palsy” and “multiple disability” referred to in clauses (a), (c) and (h) of section 2 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 (44 of 1999).
1. Blindness: It refers to a condition where a person suffers from any of the following conditions, namely: –
- Total absence of sight or
- Visual acuity not exceeding 6160 or 201200 (Snellen) in the better eye with correcting lenses or
- Limitation of the field of vision subtending an angle of 20 degree or worse;
2. 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;
3. Leprosy-cured– A person who has been cured of leprosy but is suffering from-
- Loss of sensation in hands or feet as well as loss of sensation and paresis in the eye and eye-lid but with no visible deformity;
- Manifest deformity and paresis but having sufficient mobility in their hands and feet to enable them to engage in normal economic activity;
- Extreme physical deformity as well as advanced age which prevents him from undertaking any gainful occupation.
4. Hearing impairment- Loss of 60 decibels or more in the better ear in the conversational range of frequencies;
5. Loco motor disability- It is the disability of the bones, joints muscles leading to substantial restriction of the movement of the limbs or any form of cerebral palsy.
6. Mental retardation- It is a condition of arrested or incomplete development of mind of a person which is specially characterized by sub normality of intelligence;
7. Mental illness–Any mental disorder other than mental retardation;
What is considered as severe disability
Severe Disability is described as a person with 80% or more of one or more aforementioned disabilities.
Who can issue a certificate?
The certificate is issued by the prescribed medical authority.
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. Appropriate government here means the Central Government and the State Government.
For claiming the deduction, the taxpayer shall furnish, alongwith return of income, a copy of the certificate issued by medical authority:
I. Where the person with disability or severe disability is suffering from autism, cerebral palsy or multiple disability: in Form No. 10-IA
II. In any other case: In the prescribed form (refer link https://www.incometaxindia.gov.in/_layouts/15/dit/Pages/viewer.aspx?path=http://www.incomet axindia.gov.in/Rules/Income-Tax%20Rules/103120000000007835.htm&IsDlg=0)
Where the condition of disability is temporary and requires reassessment after a specified period, the certificate shall be valid for the period starting from the assessment year relevant to the previous year during which the certificate was issued and ending with the assessment year relevant to the previous year during which the validity of the certificate expires. Thus, it needs to be renewed periodically.
Furthermore, the taxpayer is not required to submit the certificate in the prescribed form to the Income Tax Department while furnishing the Income Tax Return. Instead, he must keep the certificate with himself unless asked by the income tax department to furnish the same before them.
What is a medical authority?
As per Rule 11A of the Income Tax Rules, Medical authority shall consist of the following:
- a Neurologist having a degree of Doctor of Medicine (MD) in Neurology (in case of children, a Paediatric Neurologist having an equivalent degree)
- a Civil Surgeon or Chief Medical Officer in a Government hospital.