“PERSON WITH DISABILITY ARE ENTITLED FOR THE INCOME TAX BENEFIT U/S 80U”

TAX TALK-27.05.2013-THE HITAVADA

TAX TALK  

BY CA. NARESH JAKHOTIA

Chartered Accountant

“PERSON WITH DISABILITY ARE ENTITLED FOR THE INCOME TAX BENEFIT U/S 80U”

Query 1]

Kindly enlighten me in the following matter through your Tax Talk column:

A person is polio affected, with disorder in his legs.

1.      What is the relief available at the hands of employer for TDS in salary payments?

2.      How much and under which section TDS relief is available?

3.      Whether any documentary proof he needs to submit and at what frequency? [d_pande1@yahoo.in]

Opinion:

Deduction 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 vision
iii) leprosy-cured
iv) hearing impairment
v) locomotor disability
vi) mental retardation
vii) 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.

Query 2]

One of my women relative, not a senior citizen, is working as a teacher in a school. Her gross total annual income from salary for the F.Y.2012-13 is Rs. 3,40,000/-. Her annual savings under Section 80C is Rs. 1,00,000/-. So, after deduction, the net total income is Rs. 2,40,000/-. She does not have any other income source apart from salary. My queries are:

1.      As her gross total annual income for F.Y. 2012-13 is above Rs. 2,50,000/-, is it required to file Income Tax return even if Net total income is below Taxable limits?

2.      Is it mandatory for the school to provide Form-16, as gross total annual income is above 2,50,000/-? If the school does not provide the same, as the Net Total Income is less than Rs.2,50,000/-, can my relative still file the Income Tax return on the basis of her self computation? Though this query seems quite simple, but would help numerous teachers and other professionals. [Dr. Partho B. Choudhury- pompanagpur@gmail.com]

Opinion:

An Individual is required to file the Income Tax Return if his/her total income without allowing deductions exceeds the basic exemption limit.

For A.Y. 2013-2014 (i.e., FY 2012-13) , the basic exemption limits are as under:

a.       For Men & Women below the age of 60, the exemption limit is Rs. 2 Lacs.

b.      For senior citizens whose age is between 60 to 80 years, the exemption limit is Rs. 2.50 Lacs.

c.      For very senior Citizens (i.e., 80 years & above), the basic exemption limit is Rs. 5.00 Lacs.

There is no gender basis discrimination in the FY 2012-13 in the basic exemption limit as was there earlier.

With a look at the basic exemption limit applicable for the FY 2012-13, the replies to your queries are as under:

1.      The Gross total income (i.e., income before allowing deductions u/s 80C, 80D, 80G etc) is Rs. 3.40 Lacs. Since, the income is above the basic exemption limit, it is mandatory for her to file the Income Tax Return. It may be noted that she, being a non senior citizen, the basic exemption limit would be Rs. 2 Lacs and not Rs. 2.50 Lacs.

2.      If the employer has not deducted any tax at source, then it is not obligatory on part of the employer to issue Form No. 16. But in the given case, after allowing the deductions u/s 80C, taxable income is of Rs. 2.40 Lacs on which probably tax of Rs. 4,120/- may have been deducted. In such situations, it is compulsory for the school to issue TDS Certificate failing which the penal provisions get attracted. In any case, where Form No. 16 is not issued to the employee for any reason whatsoever, the employee can still file the income tax return on the basis of self computations also.