Tax sop for parents’ policy
FURTHER, IF YOUR PARENTS HAPPEN TO BE SENIOR CITIZENS, YOU CAN CLAIM A DEDUCTION OF UP TO `30,000 INSTEAD OF 25,000
QI have bought a mediclaim policy for myself, my wife and my children by paying a premium of `26,857 for FY2016-17. I have taken a policy for my parents with `17,430. I wanted to know whether I will be entitled to claim a deduction under Section 80D which is restricted to `25,000. Can I also claim any deduction for premium paid for my parents’ policy? Kindly clarify. PRADEEP SOLANKI
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A) Apart from the deduction of `25,000 allowable towards mediclaim premium paid by you on your family, you are eligible to claim an additional deduction of `25,000 on the mediclaim premium of your parents under Section 80D. Further, if your parents happen to be senior citizens, you can claim a deduction of up to `30,000 instead of `25,000 mentioned above.
QI purchased a plot for `6,000 in 1989. Thereafter, I have built two rooms by spending `2 lakh in 1992. In 1999, I built one more room with `1.5 lakh. I sold my house recently in July for `70 lakh. I don’t have any document or bill of constructing the house. How much capital gains tax do I need to pay on this property? BHANU PRAKASH
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A) As the plot was purchased before April 1, 2001, you have an option of substituting the cost of acquisition of plot of land with the fair market value (FMV) as on April 1, 2001. Further, you are also eligible to apply the cost of inflation index to the FMV determined above.
To determine the Long Term Capital Gains (LTCG), the Indexed cost of acquisition and Indexed cost of improvement will be deducted from the net consideration received on sale of house. The LTCG are taxed at a flat rate of 20.6 per cent. The cost inflation index in FY 2001-02 was 100 and FY 2017-18 is 272.
In case the property was sold in July 2017, the multiple factor to be applied will be 2.72 times to the cost of acquisition.
The taxes can be avoided if the net sale consideration is invested in the purchase of residential house within one year before or two years after the sale of the property or construction of the house within three years after the sale of the property.
The LTCG invested in specified capital gain bonds within six months from the date of sale of property to the extent of `50 lakh shall qualify for exemption under Section 54EC of the Income-Tax Act, 1961. You will be eligible to claim the basic threshold limit, including your other incomes, provided your status is resident.
QMedical re-imbursement charges granted to an employee by the employer, exceeding `15,000 per annum shall be treated as a perquisite and taxed accordingly. If the hospital is employer-approved, can the total medical re-imbursement be exempted without any ceiling? Does the law recognise any difference between the employer-approved hospital and the government-approved hospital?
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A) The perquisite in respect of medical facility provided by an employer is not chargeable to tax in these hospitals/clinics: Hospital owned/maintained by the employer, hospital of the Central government or state government or local authority, private hospital recommended for government employees, specified medical facility approved by the chief commissioner of the income-tax.
Any other expenditure incurred or reimbursed by the employer for providing medical facility in India is not chargeable to tax up to `15,000 in aggregate in each financial year.