FAQ- INCOME TAX
- What is an Income Tax?
It is a tax levied by the Indian government on the income of every person. The provisions governing the income- tax law are given in the income tax act, 1961.
- Do I need to file for income tax return?
A self-employed or salaried person needs to file for income tax return.
- Are there any special provisions for people with visual impairment?
Yes, the Income Tax Act 1961 provides deduction under section 80U and 80DD for a visually impaired person.
What is the main difference between deduction under Section 80U & Section 80DD of the Income Tax Act of 1961?
80DD deduction is meant for the dependent of the employee whereas 80U deduction is meant for the employee.
What does “Severe Disability” mean?
Severe Disability is described as a person with disabilities of 80% or more.
- To whom is the deduction under Section 80U allowed?
Deduction under Section 80U is allowed to any person being a resident (Indian citizen or foreign national), who, at any time during the previous year, is certified by the medical authority to be a person with disability or severe disability.
Which are the medical Authorities that can certify Under Section 80U?
The medical authorities who are deemed to certify are:
-A Neurologist with an MD in Neurology.
-For children, a Pediatric Neurologist having an equivalent degree.
-A Civil Surgeon or Chief Medical Officer (CMO) of a government hospital.
What is the procedure involved to claim deduction under this section?
The assesse 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.
What is the provision for a person with blindness and low vision under Section 80U?
The Income Tax Act, 1961 provides deduction under Section 80U to a person with blindness and low vision. The condition is that a person should not have visual impairment less than 40% and the person should be an Indian citizen. A person with visual impairment of more than 40% and less than 80% can avail Rs. 50,000 (Fifty Thousand) and a person having 80% and more visual impairment can avail Rs. 100,000 (One Lakh). But as per Budget 2015’s amended section 80U, the limit has been raised up to Rs. 75,000 for person with visual impairment of 40% and more and for person with severe visual impairment, the limit has been raised up to 1,25,000 (One Lakh Twenty Five Thousand).
Who is eligible to claim deduction under Section80DD?
Individual or a Hindu undivided family, who is a resident in India.
What expenses are eligible for deduction under Section 80DD?
Expenditure for the medical treatment (including nursing), training and rehabilitation of a disabled dependent. Money paid to Life Insurance Corporation (LIC), Unit Trust of India or any other insurer for the purpose of buying specified scheme or insurance for the purpose of maintenance of such dependent
Who can be a disabled dependent?
For individuals, spouse, son / daughter (any child), parents and brother / sister (siblings) can be the disabled dependents.
What is the eligibility criterion OF EXEMPTION FOR DISABLED DEPENDENTS?
⇒The disabled person should be wholly or mainly dependent on you for his / her support and maintenance, and should not have claimed deduction under section 80U.
What is the deducted amount under Section 80DD?
As per updated Income Tax Act, 1961 (Finance Budget 2015), for a dependent with visual impairment 80% or more is eligible for Rs. 1,25,000 (One Lakh Twenty Five Thousand) and for a dependent with 40% and more visual impairment is eligible for Rs. 75,000 (Seventy Five Thousand).
What is an assessment year IN Income Tax returns?
In simple terms, assessment year means the current financial year in which the ITR is filed. For example, if you are filing your tax in the year 2015-16 then you will be filing the returns for income earned during 2014-15 and 2015-16 will be considered as assessment year.
Can a person with blindness and low vision avail other deductions except Section 80U and 80DD?
Yes, a person with visual impairment and low vision can claim the other deductions as well. For this, one needs to be able to produce disability certificate, proofs for other deductions along with income return.
If an earning member is blind and additional dependents are also disabled, what would be the deductions in income tax?
If an earning member is a government employee and his additional dependents are also disabled, then the earning member can claim deduction under Section 80U and for his additional dependents, one can claim deduction under Section 80DD depending upon the degree of each one’s disability. Please note that deduction for 2 dependents will be clubbed under one category.
Are there different deductions for salaried employees?
There is no variation in the deductions for salaried employees and entrepreneurs. The rules of Income Tax Act, 1961-Section 80U and Section 80DD are the same for salaried employees and entrepreneurs with blindness and low vision.