Rs 75K rebate for disabled dependent

I am a senior citizen retired from Central government and getting pension.  I am getting family pension of my husband also who expired in June 2007. I am having a handicapped daughter for which I am getting medical facilities/benefits (like medicines and medical reimbursement) from CGHS (Central Government Health Scheme). The PGIMER, Chandigarh, has already issued a disability certificate (69% disability) to my daughter. I want to know whether I am eligible for tax any rebate in income tax. If yes, how much? 

— Kirpal Kaur

An individual assessee who has incurred any expenditure for the medical treatment (including nursing), training and rehabilitation of a dependant, being a person with disability, such assessee shall, in accordance with and subject to the provisions of Section 80DD of the Act be allowed a deduction of Rs 75,000 from his gross total income in respect of the previous year in which such amount has been incurred.  Therefore, in case you have incurred any expenditure of the nature described above say in the financial year 2016-17, you will be entitled to claim a deduction of Rs 75,000 against your total income for assessment year 2017-18 i.e. financial year 2016-17.

I am a salaried employee and getting HRA from my employer.  I am occupying two houses in the same city — one which is a small flat and is near my office. The same is used for working days so as to reach office on time. The other house is used for weekends. Both the houses have been taken on rent. Can I avail exemption of house rent in respect of rent paid for both the houses?

— Atma Prasad

Section 10(13A) of the Income-tax Act 1961 (The Act) provides that on any special allowance specifically granted to the assessee by the employer to meet expenditure actually incurred on payment of rent (by whatever name called) in respect of residential accommodation occupied by the assessee, to such extent as may be prescribed having regard to the area or place in which such accommodation is situated and other relevant considerations shall be exempt from tax. The exemption is not allowable in case the assessee owns the accommodation occupied by him or he has not actually incurred an expenditure on payment of rent in respect of the accommodation occupied by him. The exemption is allowable, in accordance with the provisions of Rule 2A of the Income-tax Rules 1962 (The Rules) to the extent of least of the following amounts:

a) Actual amount of such allowance received by the assessee in respect of the relevant period, or

b) Expenditure actually incurred by the assessee towards payment of rent in respect of residential accommodation occupied by him which exceeds 1/10th of the amount of salary due to him for the relevant period, or

c) An amount equal to one half of the amount of salary due to the assessee, if the accommodation is situated in Mumbai, Kolkata, Delhi or Chennai and where such accommodation is situated at any other place, 2/5th of the amount of salary.

You have stated in the query that you are occupying both the houses and paying rent in respect thereof. None of the houses seems to be owned by you. In my opinion therefore, the aggregate rent paid for accommodation occupied by you shall be considered for the purpose of arriving at the exemption allowable in accordance with the provisions of Rule 2A. This is on the basis of the Rules of interpretation that singular would include plural in spite of the fact that the word used in the section and the Rules is “rent and accommodation”.

I opened an NSS account in post office during 1989 and during June 2015 I closed the account and withdrew all the amount i.e. Rs 1,30,000. The post office deducted TDS @20% i.e. Rs 26,000. Please advise whether the total Rs 1,30,000 will be considered as income or deposit minus interest will be considered as income for calculation of income-tax.  

— Dr RK Gupta

According to the provisions of Section 80CCA of the Act, an assessee, being an individual, who has deposited any amount under National Savings Scheme out of his income chargeable to tax and has been allowed a deduction in the computation of his total income and such amount is withdrawn, the whole of the amount so withdrawn shall be deemed to be income of the assessee of that previous year in which such withdrawal is made. Therefore, the entire amount of Rs 1,30,000 withdrawn by you in the financial year 2015-16 will be treated as part of your total income and taxable according to the applicable rates on such total income.