PO interest up to Rs 3,500 exempt

SC Vasudeva

Q. I want a clarification about the exemption of Rs 3,500 interest on Post Office savings bank account from the income-tax as I understand Rs 10,000 interest is exempt from income-tax from bank’s savings bank account under Section 80TTA. I have read that exemption of Rs 3,500 from interest in post office vide letter No. Income Tax Act 501296(E) dt. 3.6.2011 is allowed (i.e. 10,000 + 3,500). This shows that Rs 3,500 is in addition to Rs 10,000. Please advise. I am a super senior citizen aged above 84 years. — Devinder Kumar Verma

A. The amount of interest received by an individual from post office savings account is exempt to the extent of Rs 3,500 under Section 10(15) of Income-tax Act 1961 (The Act).  The said amount would not be includible as part of total income of an individual.  However, deduction under Section 80TTA is admissible to the extent of Rs 10,000 from total income in respect of interest earned in savings bank account (whether with the bank or with the post office).  

Q. What are the legal implications if my NRI son delays/does not convert his savings account in India into an NRO account? — Balkrishna

A. In accordance with the Foreign Exchange Management (Deposit) Regulations, 2016 dated 1.4.2016 as amended from time to time, the existing account is required to be designated as a NRO account. You would therefore be well advised to inform your bankers about the status of your son having migrated abroad with an intention to stay outside India for an uncertain period. The implications of not informing earlier should be checked up with your bankers. 

Q. How much rebate on income-tax is permissible if treatment is taken from a super specialty hospital – for OPD and IPD treatment for general health treatment i.e. without specified/ chronic diseases. No medical reimbursement is availed from the Punjab Government as well as insurance company. — Ajit Singh Kaler

A. In computing the total income of an assessee, being an individual, a deduction is allowable for the whole of the amount paid on account of medical expenditure incurred on the health of an assessee or any member of his family as does not exceed Rs 30,000. This deduction is admissible to a very senior citizen (a person of 80 years of age or more) provided no amount has been paid to effect or keep in force insurance on the health of such person. Further, the payment in respect of such expenditure has to be made in any mode other than cash.