Q. I am a super-senior citizen and also a railway pensioner who is bedridden. I have engaged an attendant for ₹20,000 a month. Is this amount admissible for exemption under 88B of the Income Tax Act?
S. Visvanathan
A. Medical expenses incurred for yourself up to ₹50,000 a year in case there is no medical insurance policy in force can be claimed under Section 80D. Further, a deduction under Section 80DDB can be claimed up to ₹1.50 lakh for a senior citizen towards expenses for medical treatment, if he is suffering from certain prescribed diseases such as dementia, Parkinson’s etc. provided he has a certificate from a prescribed medical practitioner.
A deduction under 80U can be claimed up to ₹1.25 lakh for severe disability due to autism, cerebral palsy, multiple disabilities etc. and if a certificate from the prescribed medical authority is obtained. Section 88B is no longer in the statute.
Q. I am 65 years old , retired and my wife is 62. I have a health Insurance policy for ₹5 lakh covering my wife and me. I pay an annual premium of ₹55,000. How much tax exemption will I get under Section 80D ?
N. Balasubramanian
A. You will be in a position to claim up to ₹50,000 under Section 80D in a year for the premium paid by you for yourself and your wife as you are a senior citizen.
Q. My neighbour, aged 75, is a retired Central government employee getting a monthly pension of ₹75,000. He needs a clarification with regard to deduction u/s 24 and u/s 80 C. His only source of income is pension. He recently extended his house with two more bedrooms.
The house is owned by him. Because of his old age, he could not avail a housing loan. He availed a personal loan to the tune of ₹20 lakh against pension from the SBI. The loan carries an interest rate of 12% and repayable in 48 EMIs. The entire loan proceeds are used for the construction only.
His queries are:
1) Can he claim deduction u/s 24 for payment of interest to SBI for the personal loan and EMI principal u/s 80 C ?
2) If permitted, does he need to show any evidence to prove the funds were utilised for construction purposes?
H. Ramakrishnan
A. Deduction under Section 24 can be claimed only when a certificate is obtained from the lender stating the purpose of the loan, interest paid and the principal repaid for that year. In the given case, we are not sure whether the SBI would be able to provide a certificate to this effect.
Under housing loan, the lenders, especially the institutions, issue the loan only after ensuring it is used for construction or purchase or renovation of an house and in case of a personal loan, the bank is not obligated to monitor loan usage.
Under section 80C, deduction can be availed only for construction or purchase of house property and not for renovation.
Q. Recently, I had purchased a house for residential purpose in my wife’s name. She is a homemaker with nil income. I had taken a loan from Bank of Baroda. Can I claim benefits u/s 24 and 80C?
Manish Kumar Singh
A. Under sections 24 and 80C, only the owner of the property can claim benefits as provided. In your case, the property is in the name of your wife though the loan is availed by you; hence, you cannot claim benefit.
(The author is partner, GSS Associates, Chartered Accountants, Chennai)
