Not all treatments get tax benefit

SC Vasudeva

I am a Punjab Government pensioner and senior citizen. My wife was a housewife and senior citizen. We had been operating a joint bank account in the State Bank of Patiala. From this account, Rs 8 lakh was deposited in an FD on April 20, 2016 in my wife's name whose name appeared at number 1 in the said account. She had also submitted form 'H' to the bank. My wife expired in January 2017 due to rheumatoid arthritis, post CABG breathlessness problems. She had no other source of income and she never filed any income tax return. I spent Rs 86,417 on her treatment at a hospital during financial year 2016-17 and the medical reimbursement bills are pending with Punjab Government for reimbursement. The bank credited Rs 49,000 as interest on the FD on April 24, 2017. I had also spend Rs 5,09,363 on my indoor treatment in hospital during 2016-17 and received only Rs 1,56,414 as reimbursement from the insurance company during 2016-17. Am I eligible for additional tax benefit on the amount spent on our treatment? Are the Rs 49,000 received as interest on the FD taxable or not in my hands? — Baldev Singh

Section 80DDB of the IT Act 1961 allows a deduction of Rs 60,000 from the total income of a senior citizen if he or his dependant is suffering from: Neurological diseases where the disability level has been certified to be of 40% and above; dementia; dystonia musculorum deformans; motor neuron disease; ataxia; chorea; hemiballismus; aphasia; Parkinson's disease; malignant cancers; full blown AIDS; chronic renal failure; haematological disorders — haemophilia; thalassaemia. It seems your wife was not suffering from any of the above diseases. You are therefore not entitled to claim any deduction against your total income in respect of the expenditure incurred by you on her treatment. You have not mentioned your disease. In case you were suffering from any of the above diseases, a deduction to the extent of Rs 60,000 is allowable against your total income. You have stated that your wife was a housewife and did not have any income. It seems the source of FD was out of your income. The proportional amount of interest up to March 31, 2017 should be taxable in your hands for assessment year 2017-18. The balance amount for the period April 1 to 24, 2017 should also be included in your total income for assessment year 2018-19.

Deduction up to Rs 30,000 for medical expenses was allowed to very senior citizens for financial year 2015-16. Kindly confirm if the same is still in operation for financial years 2016-17 and 2017-18. Refer to your clarification to Baldev Raj's query (May 8, 2017) where the income tax may be Rs 3,500 for assessment year 2018-19. — Vishwa Nath Bhatia

A deduction for the amount paid to effect or keep in force an insurance on the health of the very senior citizen is allowable to the extent of Rs 30,000 from the total income of such an assessee. This amendment was brought in for assessment year 2016-17 and is in operation for assessment years 2017-18 and 2018-19. The tax computations of Baldev Raj were in respect of assessment year 2017-18. Your presumption is correct that for assessment year 2018-19 the amount of tax payable will be Rs 3,605 (Rs 3,500 plus education cess thereon at 3 per cent of tax).