Section 80U: Deduction in case of a person with disability

By | February 13, 2016

Deduction u/s 80U is allowed to any person who is resident in India and who suffers from any disability or severe disability.

If a person suffers from not less than 40% of any disability, then he is eligible for deduction to the extent of Rs. 50,000/- and in case of severe disability to the extent of Rs. 1,00,000/-.

For availing deduction u/s 80U, the assessee needs to fulfill certain legal formalities like he has to obtain a certificate from the medical authority constituted by either the Central or the State Government, along with the Return of Income for the year for which deduction is claimed. 
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 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 manifests 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;

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.

Related Cases:

S. 80U of the IT Act, 1961—Deduction—The assessee is a physically handicapped person with substantial extent of disability and was enjoying benefit of deduction provided u/s 80U of the Act, but same came to be withdrawn on the ground the disability certificate produced by the assessee is not showing the permanant disability of more than 50% which is necessary requirement by virture of r. 11D of Rules 1962, as amended w.e.f. 1.4.1992. If the certificate issued by the concerned authority shows disability of the person concerned as having considerably effected his capacity to do normal work, it is very much liable to the acted upon by the departmental authority for providing the benefit of deduction u/s 80-U of the Act. Although otherwise assessee having the permanant disability of 55% so as to have come within the purview of amended requirement and, therefore, he is entitled for benefit u/s 80-U of the Act—B. Indiramma vs. ITO

S. 80U of IT Act, 1961, r. 11D of It Rules 1962—Deduction—After amendment of the r. 11D of Rules 1962, it is mandatory to substantiate the fact in the disability certificate that there is more than 50% disability but such condition is not applicable to the certificates produced before 1st April, 1992 to get the benefit u/s 80U of the Act. However, the assessee is entitled the benefit of deduction u/s 80U as he has already placed certificate showing 55% disability which was ignored by the assessing authority—B. Indiramma vs. ITO. [2010] 229 CTR 377 (KER)

Amendments:

Clause 23 of the Bill, seeks to amend S. 80U of the Income-tax Act relating to deduction in case of a person with disability.

Budget 2015 proposed to amend  S. 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 Rs. 1,00,00/- to Rs. 1,25,000/-.

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 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 u/s 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.

Please note the difference between 80DD deduction is in case of the dependent of the employee whereas 80U deduction is in case of the employee himself.

These amendments will take effect from 1st April, 2016 and will, accordingly, apply in relation to the A.Y. 2016-17 and subsequent assessment years.

Reference:

As Per Section 80U, of the Finance bill, 2015-

Amendment of section 80U.

In section 80U of the Income-tax Act, with effect from the 1st day of April, 2016, for sub-section (1), the following sub-section shall be substituted, namely:—

“(1) In computing the total income of an individual, being a resident, who, at any time during the previous year, is certified by the medical authority to be a person with disability, there shall be allowed a deduction of a sum of seventy-five thousand rupees:

Provided that where such individual is a person with severe disability, the provisions of this sub-section shall have effect as if for the words “seventy-five thousand rupees”, the words “one hundred and twenty-five thousand rupees” had been substituted.”

As Per Section 80U, of the Income Tax Act, 1961-

Deduction in case of a person with disability.

(1) In computing the total income of an individual, being a resident, who, at any time during the previous year, is certified by the medical authority to be a person with disability, there shall be allowed a deduction of a sum of fifty thousand rupees :

Provided that where such individual is a person with severe disability, the provisions of this sub-section shall have effect as if for the words “fifty thousand rupees”, the words “seventy-five thousand rupees” had been substituted:

Provided further that for the assessment years beginning on or after the 1st day of April, 2010, the provisions of the first proviso shall have effect as if for the words “seventy-five thousand rupees”, the words “one lakh rupees” had been substituted.

(2) Every individual 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 :

Provided that where the condition of disability requires reassessment of its extent after a period stipulated in the aforesaid certificate, no deduction under this section shall be allowed for any assessment year relating to any previous year beginning after the expiry of the previous year during which the aforesaid certificate of disability had expired, unless a new certificate is obtained from the medical authority in the form and manner, as may be prescribed, and a copy thereof is furnished along with the return of income under section 139.

Explanation.For the purposes of this section,—

(a) “disability” shall have the meaning assigned to it in clause (i) of section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 1996), and includes “autism”, “cerebral palsy” and “multiple disabilities” referred to in clauses (a), (c) and (h) of section 2of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 (44 of 1999);

(b) “medical authority” means the medical authority as referred to in clause (p) of section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 1996), or such other medical authority as may, by notification, be specified by the Central Government for certifying “autism”, “cerebral palsy”, “multiple disabilities”, “person with disability” and “severe disability” referred to in clauses (a), (c), (h), (j) and (o) 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);

(c) “person with disability” means a person referred to in clause (t) of section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 1996), or clause (j) 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);

(d) “person with severe disability” means—

(i)  a person with eighty per cent or more of one or more disabilities, as referred to in sub-section (4) of section 56 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 1996); or

(ii)  a person with severe disability referred to in clause (o) 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).

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