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TMI BlogTax Deductions for Persons with Disabilities : Clause 154 of the Income Tax Bill, 2025 vs. Section 80U of the Income Tax Act, 1961X X X X Extracts X X X X X X X X Extracts X X X X ..... ting Section 80U of the Income Tax Act, 1961, and is to be read in conjunction with the procedural and definitional framework provided by Rule 11A of the Income-tax Rules, 1962. The legal significance of this provision is multi-layered. It not only reflects the evolving approach of Indian tax law towards the inclusion and welfare of persons with disabilities, but also demonstrates the ongoing process of legislative modernization and harmonization with contemporary social legislation, such as the Rights of Persons with Disabilities Act, 2016. The comparative study of Clause 154, Section 80U, and Rule 11A is essential to understand the continuity, changes, and practical implications for taxpayers, tax authorities, and medical professionals i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 75,000 or Rs. 1,25,000, respectively, while computing total income. * Residency Requirement: The deduction is available only to individuals who are residents in India during the tax year. This is consistent with the existing Section 80U, which also restricts the benefit to resident individuals. * Certification: The individual must be certified by a "medical authority" as a person with disability or severe disability. The certification must be obtained at any time during the tax year, offering flexibility in timing. * Quantum: The deduction is fixed at Rs. 75,000 for persons with disability and Rs. 1,25,000 for persons with severe disability, mirroring the quantum specified in the current Section 80U (after the Finance Act, 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 54 is substantially modeled on Section 80U of the Income Tax Act, 1961. Both provisions: * Apply to resident individuals. * Require certification by a medical authority. * Provide a fixed deduction amount (Rs. 75,000/Rs. 1,25,000). * Mandate submission of the certificate in the prescribed form and manner along with the return of income. * Stipulate that the deduction is not available beyond the validity of the certificate unless renewed. 2. Differences in Language and Drafting While the substance is largely unchanged, certain differences in language and structure are notable: * Reference to Definitions: Section 80U refers to definitions in the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Partic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 80DD). It specifies: * For autism, cerebral palsy, and multiple disabilities: Certification may be done by a neurologist (MD in Neurology), a pediatric neurologist (for children), or a Civil Surgeon/Chief Medical Officer in a government hospital. * For other disabilities: Certification must follow forms and procedures notified under relevant government notifications, ensuring that the medical authority is competent and the process is standardized. 2. Form and Mode of Certificate Submission Rule 11A(2) mandates submission of the certificate along with the return of income, in prescribed formats: * Form No. 10-IA: For autism, cerebral palsy, and multiple disabilities. * Other prescribed forms: As notified by the government f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e return facilitates verification and reduces the risk of false claims. * Procedural Efficiency: Alignment of certificate submission with the return filing process (under the new section 263) may streamline administration. 4. For Policy Implementation * Inclusivity: The provision reflects a broader policy commitment to social inclusion and the economic empowerment of persons with disabilities. * Potential Gaps: The fixed deduction does not account for the actual diversity of expenses or needs among persons with different disabilities, which may warrant future policy attention. Conclusion Clause 154 of the Income Tax Bill, 2025 preserves and modernizes the core features of Section 80U of the Income Tax Act, 1961, offering standardiz ..... X X X X Extracts X X X X X X X X Extracts X X X X
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