Tax Talk

I am a housewife aged 68 years. I invest in shares and mutual funds with the amount received from my son as gift. I receive interest income and also income from short- and long-term capital gains. All the income put together is within the threshold limit of ₹3 lakh.

Am I liable to pay any tax? My doubt is whether STCG and LTCG are taxable separately irrespective of other income, or do they form part of the total income?

P Anandam

As per the Income Tax Act, 1961, an individual will have a tax liability only when her income exceeds the basic exemption limit. In the case of a senior citizen (person above 60 years of age), the current limit is ₹3 lakh. Further, all income including STCG and LTCG can be included while determining the total income and compared with the threshold. In your case, since the total income is below ₹3 lakh, there should not be any tax liability.

I am a pensioner with a health policy. The policy covers only 63 diseases. As per my knowledge, other medi-claim policies also do not cover some diseases, and cover existing diseases after 2-3 years.

Is exemption available for such medical expenses that insurance companies do not cover?

KG Nagar

Section 80D of the Income Tax Act, 1961, has a precondition that a senior citizen claiming deduction towards medical expenditure should not have a health insurance in his name. Since you do not satisfy this condition, you will not be able to claim deduction for medical expenses.

However, in the case of specified ailments, you can take recourse to the provisions of Section 80DDB of the Income Tax Act and claim deduction for expenditure incurred on medical treatment, subject to fulfilment of conditions specified.

Such deduction shall be equal to the expenses incurred subject to a limit of ₹1 lakh (for senior citizens). The list of specified diseases for the purposes of this section includes neurological disorders, malignant cancers, chronic renal failure, etc.

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

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