Your Taxes

Under Section 80TTB, deduction is allowed to the extent of ₹50,000 on interest received from bank and post office deposit accounts by senior citizens. Is this applicable to interest on company deposits and debentures, too?

RM Ramanathan

Section 80TTB of the Income Tax Act provides for a deduction of up to ₹50,000 from income earned by senior citizens by way of interest on deposits with the following: a banking company to which the Banking Regulation Act applies; a cooperative society engaged in the business of banking (including a cooperative land mortgage bank or a cooperative land development bank); or a post office as defined in clause (k) of Section 2 of the Indian Post Office Act.

The interest earned on company deposits (other than a banking company or cooperative society as mentioned above) and on debentures issued by the company are not covered under the provisions of Section 80TTB.

Is interest earned on deposit under the Senior Citizen Deposit Scheme eligible for exemption under Section 80TTB?

Uday Kajaria

We understand that by senior citizen deposit scheme, you mean the Senior Citizen Savings Scheme (SCSS). An SCSS account can be opened with an authorised bank under the Banking Regulation Act or a post office. Thus, interest earned from such account is eligible for deduction under Section 80TTB.

In FY2016-17, I underwent surgery for cancer and had chemotherapy. The hospitalisation expenses were partly borne by me and partly covered by an insurance policy. In respect of the expenses met by me, I could claim tax deduction for critical illness. Over the subsequent financial years, I am still incurring periodical expenses on scans and tests. Do these expenses borne by me qualify for deduction under critical illnesses or any other provisions of the I-T Act? If so, to what extent?

BS Iyer

As per the I-T Act, an assessee may claim deduction for the expenses incurred for him/herself or a dependent (as defined) in respect of the medical treatment of specified ailments after reducing any amount received from the insurance company or employer. The deduction is available only where the assesse obtains a prescription for such medical treatment from a specified specialist.

Thus, if you obtain a prescription from an oncologist, prescribing the periodical tests for the treatment of cancer, you may claim the deduction of the expenses to the extent of the permissible amount of ₹40,000 (if age is less than 60 years), or ₹60,000 (senior citizens — 60 years or more), or 80,000 (very senior citizens — 80 years or more).

The writer is a practising chartered accountant. Send your queries to taxtalk@thehindu.co.in

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