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I was a member of an approved employees superannuation fund established by my last employer. The corpus includes accumulations transferred from my previous employments. On retirement, my company purchased an LIC policy for me and other retirees using our corpus. Under the policy, I now receive a monthly annuity of ₹15,500. I did not have the option of receiving the full corpus on retirement. The annuity I receive is in relation to my former employment/s. Am I entitled to standard deduction under Section 16 (ia), and if so, how much?
BS Iyer
As per a clarification from CBDT, the pension a taxpayer receives from a former employer is taxable under ‘Salaries’. So, a taxpayer is entitled to claim a standard deduction of ₹40,000, or the amount of pension, whichever is less. As your gross ‘salary’ is higher than ₹40,000, you can claim the standard deduction of ₹40,000.
I am a retired government employee, now 71. I am diabetic since 1982. I have a medi-claim policy, but it covers only hospitalisation, and not OPD, charges.
Due to diabetes, I am blind on one eye. The other eye was also operated in 2016, and the charges paid by the medi-claim. But for regular check ups, I have to visit the hospital 5-6 times a year. During each visit, I pay, by credit card, around ₹7,000 towards consultation fees and tests.
Can I claim these charges as deductions under Section 80 D?
Kamlesh Gupta
As per Section 80D of the Income Tax Act, deduction is allowed for payments made towards medical expenditure incurred on the health of a senior citizen, provided there is no insurance policy in force covering the health of such a person.
Since you have a medi-claim insurance policy in force, you are not eligible.
However, you can avail yourself of a deduction under Section 80U. As per Section 80U, any resident individual who is certified by a medical authority to be a person with disability (disability of 40 per cent or more) in accordance with Section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995, shall be allowed a deduction of ₹75,000 (₹1,25,000 for persons with severe disability of 80 per cent or more) from the gross taxable income.
Here, disability includes blindness / low vision.
The writer is Partner, Deloitte India. Send your queries to taxtalk@thehindu.co.in
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