Bailabel Type : bailable

Description

Section 80U of the Income Tax Act, 1961 provides a deduction to individuals who are suffering from a disability. This section aims to provide financial relief to those who face challenges due to physical or mental disabilities. The deduction helps reduce the overall taxable income of a person with a disability, providing them with a benefit to ease their financial burden.

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Key Features of Section 80U:

1. Eligibility:

• This deduction is available to individuals who are resident in India and have a disability.
• The person must have disability that has been certified by a medical authority (such as a doctor or a specialist recognized by the government).
• The person should be the individual taxpayer (i.e., not available for companies, HUFs, etc.).

2. Type of Disabilities Covered:

• The deduction applies to individuals with disabilities that are specified under the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995.

  Some of the disabilities that are eligible under this section include:

  • Blindness
  • Low vision
  • Leprosy cured
  • Hearing impairment
  • Locomotor disability
  • Mental retardation
  • Mental illness
  • Autism
  • Cerebral palsy
  • Multiple disabilities (a combination of any of the above)

  The disability must have been certified by a medical authority for the individual to claim the deduction.

3. Amount of Deduction:

• For Individuals with Disability (40% to 80% disability):
  • The deduction available under Section 80U is ?75,000 per annum.
• For Individuals with Severe Disability (More than 80% disability):
  • If the person has a severe disability (more than 80% disability), the deduction increases to ?1,25,000 per annum.

4. Certification Requirement:

• The individual must obtain a certificate of disability from a recognized medical authority in India.
  • The certificate must specify the extent of the disability (in percentage), which determines the amount of deduction that can be claimed.
  • If a person has a severe disability, the certificate must explicitly mention this for the higher deduction of ?1,25,000 to be applicable.

5. No Need for Proof of Expenses:

• Unlike some other deductions, there is no requirement to provide proof of any medical expenses or treatment. The deduction is fixed and can be claimed by simply being eligible for the deduction due to disability.

Punishment

Section 80U is a provision that allows individuals with disabilities to claim a deduction to reduce their taxable income. However, if an individual falsely claims this deduction by providing incorrect information or fake certificates of disability, it can lead to penalties under the Income Tax Act.

Punishments and Legal Consequences:

1. Penalty for Concealment of Income (Section 271(1)(c)):

   • If an individual misrepresents their disability or provides false information to claim the deduction under Section 80U, a penalty may be levied under Section 271(1)(c) for concealment of income.
   • The penalty can be 100% to 300% of the tax evaded.

2. Interest for Underpaid Taxes (Section 234A, 234B, 234C):

   • If an individual under-reports their income or claims a deduction they are not eligible for, they may be liable for interest under sections like 234A (for delayed filing), 234B (for underpayment of advance tax), and 234C (for shortfall in advance tax installments).

3. Prosecution for Willful Evasion (Section 276C):

   • If an individual willfully evades tax by providing false or incorrect information, it may result in prosecution under Section 276C.
   • This could lead to imprisonment for 3 months to 7 years, along with a fine.

4. Invalid Claim (Section 292C):

   • If the certificates or documents are found to be forged or incorrect, the claim for deduction will be rejected, and the taxpayer may be required to pay the tax amount, along with penalties and interest.