Rule 11A
Permanent physical
disability for
purposes of section 80DD
11A.1 Under section 80DD of the Act, as inserted with
effect from 1-4-1991, a resident individual or HUF is eligible for deduction
towards expenditure incurred for the medical treatment (including nursing),
training and rehabilitation of a person who is a relative of the individual or
a member of the HUF and who is suffering from a permanent physical disability
(including blindness). From 1-4-1999, the scope of this deduction was enlarged
so as to cover, apart from the above-mentioned expenditure, any payment or deposit
made under any scheme framed in this behalf by the LIC or UTI which satisfies
certain specified conditions. For the assessment years 1991-92 to 1998-99, the
quantum of deduction was fixed as Rs 15,000, and for the assessment year
1999-2000, the quantum was fixed as the expenditure incurred, subject to a
maximum of Rs. 40,000. From the assessment year 2000-2001, the quantum of
deduction will be at a flat figure of Rs. 40,000. The permanent physical
disability is required to be specified in the rules in this behalf. Rule 11A
specifies the categories of such disabilities.
11A.2 The categories of disabilities, etc., specified
in the rule 11A are as follows:
(i) permanent
physical disability shall be regarded as a permanent physical disability if it
falls in any one of the categories specified below, namely:—
(a) permanent
physical disability of more than 50 per cent in one limb ; or
(b) permanent
physical disability of more than 60 per cent in two or more limbs; or
(c) permanent
deafness with hearing impairment of 71 decibels and above ; or
(d) permanent
and total loss of voice;
(ii) blindness
shall be regarded as a permanent physical disability if it is incurable and
falls in any one of the categories specified below, namely:
All with
corrections
|
Better
eye |
Worse
eye |
|
(a) 6/60-4/60 |
3/60 to Nil |
|
or |
|
|
Field of vision |
|
|
110-20 |
|
|
(b) 3/60
to 1/60 |
F.C. at 1 foot to Nil |
|
or |
|
|
Field of vision |
|
|
100 |
|
|
(c) F.C.
at 1 foot to Nil |
F.C. at 1 foot to Nil |
|
or |
or |
|
Field of vision |
Field of vision |
|
100 |
100 |
|
(d) Total
absence of sight |
Total absence of sight; |
(iii) Mental
retardation shall be regarded as a mental retardation if intelligence quotient is
less than 50 on a test with a mean of 100 and a standard deviation of 15 such
as the Wechsle scale.
Deduction not linked to actual expenditure
11A.3 The CBDT have clarified that the allowance of
this deduction at a flat rate is statutory in nature once the prescribed are
fulfilled and the assessee has incurred some expenditure. - Circular No. 702, dated 3-4-1995 [Annex 11A.1].
Proof for incurring expenditure
11A.4 It has been clarified that, for purposes of
deduction of tax at source from salaries, it would be sufficient if the
employee furnishes a medical certificate from a Government hospital and a
declaration in writing duly signed by the claimant certifying the actual amount
of expenditure on account of medical treatment (including nursing), training and
rehabilitation of the handicapped dependent, and receipt/acknowledgement for
the amount paid or deposited in the specified schemes of LIC or UTI. The person
responsible for deduction of tax at source need not insist upon of
vouchers/bills by the employees for having incurred expenditure - Circular No. 775, dated 26-3-1999 [Annex 11A.2].
11A. 5 The
decided cases given under rule 11D may also be referred to, as they are
relevant for purposes of determining the question of allowability of the
deduction under section 80DD, read with
rule 11A, as well.
Annex 11A.1
Circular No. 702, dated 3-4-1995
As long
as conditions mentioned in section 80DD are fulfilled and assessee has incurred
any expenditure on medical treatment, etc., of handicapped person, deduction as
envisaged in section 80DD will be allowable in full
1. Under the provisions of section 80DD of the
Income-tax Act, 1961, an assessee who is resident in India being an individual
or a Hindu undivided family is allowed a deduction of Rs. 15,000 for
expenditure incurred in respect of handicapped dependants subject to the
following conditions:—
(i) the
handicapped dependant is a relative of the assessee and is not dependant on any
person other than the assessee for his support or maintenance;
(ii) he
is suffering from a permanent physical disability (including blindness) or
mental retardation and the same is certified by a Physician, Psychiatrist,
etc., working in Government hospital;
(iii) the
disability has the effect of reducing considerably such person’s capacity for
normal work or engaging in a gainful employment or occupation;
(iv) the
assessee has incurred any expenditure for medical treatment (including
nursing), training and rehabilitation of the handicapped dependant.
2. The Board has received several representations
seeking clarification regarding the quantum of deduction available in relation
to the expenditure incurred on the handicapped dependants.
3. It is hereby clarified that the deduction under section 80DD of the Income-tax Act, 1961 is
statutory in nature. Therefore, as long as the conditions mentioned in the
section are fulfilled, and the assessee has incurred any expenditure on medical
treatment, etc., of the handicapped person, the deduction as envisaged in the
section will be allowable in full.
Circular No. 775 dated 26-3-1999
Whether
it would be sufficient if the employee furnishes a medical certificate from a
Government Hospital and a declaration in writing duly signed by the claimant
certifying the actual amount of expenditure on account of medical treatment
(including nursing), training and rehabilitation of the handicapped dependant
and receipt/acknowledgement for the amount paid or deposited in the specified
schemes of LIC or UTI
1. Section 80DD, substituted for sections 80DD and
80DDA by the Finance (No. 2) Act, 1998, lays down that the deduction on account
of expenditure incurred by way of medical treatment (including nursing),
training and rehabilitation of a handicapped dependant or amount paid or
deposited in specified schemes of Life Insurance Corporation or Unit Trust of
India for the maintenance of handicapped dependent, shall be limited to Rs.
40,000 in the aggregate while computing the total income of the parent or the
guardian of such handicapped dependant.
2. It has come to the notice of the Board that some
of the DDOs are asking the employees to submit medical vouchers/bills in
connection with the expenses incurred on the medical treatment of their handicapped
dependant apart from a certificate from the Government hospital regarding the
permanent physical disability or mental retardation of the handicapped
dependant.
3. It is clarified that it would be sufficient if
the employee furnishes a medical certificate from a Government Hospital and a
declaration in writing duly signed by the claimant certifying the actual amount
of expenditure on account of medical treatment (including nursing), training
and rehabilitation of the handicapped dependant and receipt/acknowledgement for
the amount paid or deposited in the specified schemes of LIC or UTI. Therefore,
DDOs may not insist upon production of vouchers/bills by the employees for
having incurred expenditure on medical treatment of their handicapped dependants
for allowing the deduction under section 80DD for the purpose of computing tax
deductible at source.
4. This clarification is applicable for the purpose
of tax deduction at source from salaries under section 192 of the Income-tax
Act, 1961 during the financial years 1998-99 and onwards.