Tax Talk

Kindly let me know whether the standard deduction of ₹40,000 is applicable for pensioners (an ex-banker) aged above 60 years.

Laxman Pai

With effect from FY 2018-19, income under the head ‘Salaries’ shall be computed after considering a deduction of ₹40,000, or the amount of salary, whichever is less. As pension is taxable as salary, the standard deduction of ₹40,000 can be claimed.

I understand that medical expenses incurred by senior citizens who do not have any medi-claim policy are eligible for deductions u/s 80D with a limit of ₹50,000/FY. I am a senior citizen who has diabetes and hypertension, and I am on regular medication and take lab tests. Can I claim the said deduction for the monthly bills of medicines purchased on the basis of a prescription from a registered medical practitioner and paid through debit card?

M Palaniswamy

As per the provisions of the Income Tax Act, a deduction from the total income is allowed for payments made towards medical expenditure incurred on the health of the individual. The deduction is limited to ₹50,000 per financial year for senior citizens, subject to fulfilment of the following conditions:

  • Payment for medical expenditure should be by any means other than cash (except in case of preventive health check-up expenses)
  • There should not be any insurance policy in force covering the health of such senior citizen.

Since you do not have any medi-claim insurance policy, you may claim the amount spent towards medical expenditure, subject to the above conditions. It is recommended to maintain the documents evidencing the cost of medical expenditure to substantiate the claim before tax authorities.

I am a pensioner and get interest income on deposits. Can I claim tax deduction under Section 80G (on donations) against the income received through sale of shares (LTCG). If so, what is the maximum I can donate?

Raghavan Kumar

As per the provisions of the Income Tax Act, deductions under chapter VI A (covering Sections 80C to 80U) cannot be claimed against income earned from long-term capital gains. You may, however, avail yourself of the donation benefit under Section 80G from your pension income and the interest income earned on deposits.

The writer is Partner, Deloitte India. Send your queries to taxtalk@thehindu.co.in

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