PPF is best for retirement
QMy widowed sister aged over 50 years and receives widow pension. She has no other source of income. She received `5 lakh compensation after her son was expired in a road accident. After all deductions, including lawyer fees, etc, she was left with `3 lakh. I parked her money in two banks as fixed deposits. Recently, I came to know that tax was deducted by the banks. So does she need to file income-tax now? CHIKILAM SWAMY Hyderabad
A) As per the Income-Tax Act, a person is required to file his or her income-tax returns if he or she has income more than the basic exemption limit. If the net income of the person chargeable to tax is upto `3.5 lakh for the FY2018-19 he or she is allowed a rebate of `2,500 on such tax amount calculated. Assuming that your sister’s total income is below the basic exemption limit, she needs to file the return to claim the refund of TDS. She can submit Form 15G/15H to the bank declaring that the tax calculated for the current year would be nil and the bank need not deduct any TDS on the interest amount.
QI wanted to know whether I am eligible to claim the deduction towards expenses incurred on my dependent mother who has suffered from H1N1 Flu and was hospitalised during September 2017. I had to bear the treatment cost of `29,500. Will I be entitled to claim deduction under Section 80DDB towards the medical treatment expenses? BHAVANA Via mail
A) Section 80DDB is applicable if the assessee has actually incurred any expenditure for the medical treatment for specified disease or ailment prescribed in rule 11DD (1) of the Income Tax Rules: In the case of an individual, for himself, or a dependent relative. And in the case of HUF, for any member of the HUF.
Since H1N1 flu is not covered in the list of specified diseases and ailments under rule 11DD (1), you are not entitled to claim any deductions.
QI am a private employee. I will be grateful if you could kindly elaborate on Public Provident Fund. K.PANDURANGA RAO Mudinepalli, AP
Public Provident Fund (PPF) is a tax-free savings scheme, where interest is not taxable. Deposits made towards PPF accounts can be claimed as tax deductions. This makes the PPF scheme one of the most tax efficient instruments in India. It was launched to encourage savings and is helpful in building a retirement corpus. You can open a PPF account in any PSU bank or post office.