PPF a/c can be extended any number of times

SC Vasudeva

Q. Please advise if it is possible to withdraw only accrued interest on PPF account without disturbing the main deposit. Also clarify whether the PPF account can be extended for over 5 years after its maturity. Senior citizens and retired employees who have no pension from any source are a worried lot. Investing their hard-earned money in extremely volatile stock market is full of risk. Please guide where to invest. — A senior citizen, Nahan

A. The application form for withdrawal under the Public Provident Fund Scheme 1968 does not require to state whether the withdrawal is of the interest amount or of the principal amount. A consolidated amount can be withdrawn which may comprise interest amount on the basis of the entries in the pass book. It may, however, not be possible to state in the withdrawal form that you would like to withdraw the amount of interest only.

The contribution to PPF can be made for a period beyond the period of 20 years (15+5) and there is no embargo with regard to a period for which the PPF account can be maintained. You can thus avoid the extreme volatility in the stock market by continuing your deposit under PPF Scheme beyond a period of 15 years.

Q. I am 80 years old (very senior citizen), Punjab Government pensioner. Besides pension, I get Rs 500 per month as fixed medical allowance. This amount is included in the gross income while filing income-tax return.

In the instructions for filing ITR-1 SAHAJ for AY 2017-18, it has been mentioned in part C — deductions and taxable total income, heading 80D as follows:

Upper limit for 80D deduction that can be claimed

(B) Medical expenditure in the case of a very senior citizen (above 80 years) where no amount has been paid for his health insurance. 

1. On self: Rs 30,000

Note: The above aggregate deduction shall not exceed Rs 30,000.

For preventive health check-up of self or family members: Rs 5,000 within the overall limit of Rs 30,000.

My queries are as under:

1. Does the above-mentioned provision relate to the amount spent for chronic diseases only or for the cure of other diseases also?

2. I am getting Fixed Medical Allowance @ Rs 500 p.m. In view of this, can I avail deduction for the purchase of medicines for day-to-day ailments?

3.  Does the deduction permissible for preventive health check-up relate to the fee of doctor only or for purchase of medicines also?

4. Can I claim deduction on the amount spent for the purchase of medicines for my wife also, who is a housewife?

5. What proof is required to claim the deduction in this respect? — Amarjit Singh Chopra

A. (a) The deduction under Section 80D of the Income-tax Act 1961 (The Act) is allowable in respect of the amount paid on account of medical expenditure incurred on the health of the assessee or any member of his family in case of a senior citizen to the extent of Rs 50,000 for assessment year 2019-20. The expenditure can be in respect of any disease which may not be a chronic disease.

(b) You can avail deduction of the fixed medical allowance provided the amount paid has been incurred on medical expenditure in respect of health of yourself and any member of your family. Therefore, medicines purchased for day-to-day ailments will be covered in case the amount is spent on curing such ailments.

It may be noted here that w.e.f. assessment year 2019-20, a standard deduction of Rs 40,000 is available against the pension income (i.e. salary).

(c) Deduction for payment made on account of preventive health check-up in the ordinary course should cover fee paid to doctor and tests carried out for such preventive check-up of any of your family member.

(d) You can claim deduction for the amount spent for purchase of medicines for your family members also provided the supportive documents for such purchases are available.

(e) The evidence in support of the expenditure incurred can be in the shape of receipt for the fee paid to doctor, cash memos for the medical expenditure incurred along with the prescription of the doctor and receipt from diagnostic centre for tests carried out on account of the preventive measure or for curing any disease.

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