Senior citizens allowed rebate of Rs 50,000 for medical treatment

SC Vasudeva

I am a senior citizen aged 76. I am a Central government pensioner and getting Rs 1,000 per month medical allowance which is taxable. I am paying Rs 5,400 per year to CGHS as contribution for availing cashless indoor treatment. My query is whether expenditure incurred on doctor fee + tests + cost of medicines can be claimed for rebate.  If so, up to what amount?

- Sohan Lal Arora

A senior citizen is allowed a deduction to the extent of Rs 50,000 for medical expenditure incurred during a financial year. Accordingly, you would be entitled to claim the aforesaid deduction in case you have incurred medical expenditure to the extent of the above amount.

My queries are as under: 1.Whether a rebate of Rs 2,500 is permissible under Section 87A  for AY 2019-20?

2.Is exemption of Rs 3,500 on interest income in post office savings account available for AY 2019-20?

3.Is standard deduction of Rs 15,000 on family pension available in AY 2019-20 or not?

4.Whether a pensioner would be eligible for a standard deduction of Rs 40,000 from his/her income for the FY 2018-19. Please guide in which column or section this deduction is to be mentioned in ITR-I.

Further, please clarify if a “family pensioner” who avails of standard deduction of Rs 15,000 maximum under Section 57(iia) and is also a “pensioner”, can he avail both the above standard deductions i.e. Rs 15,000 and Rs 40,000 simultaneously.

5.The overall exemption limit of interest on savings bank account, including interest on FDs, stands increased from Rs 10,000 to Rs 50,000 for AY 2019-20. Please clarify if this is under Section 80TTA or the enhanced limit of exempted interest of Rs 50,000 is for senior citizens only.  6.Please clarify whether a rebate of Rs 50,000 is available under Section 80D on payment of fixed monthly medical allowance (health insurance premium) for purchase of miscellaneous medicines or not subject to availability of cash memos or whether this fixed monthly allowance is also covered u/s 80D in AY 2019-20.

- Swinder Singh

(a) The rebate under Section 87A of the Act is admissible to the extent of Rs 2,500 where the total income of an assessee does not exceed Rs 3,50,000.

(b) The exemption to the extent of Rs 3,500 in respect of interest earned in a post office savings bank account is exempt from tax for the assessment year 2019-20. Apart from the said exemption, a deduction is admissible to the extent of Rs 50,000 to a senior citizen under Section 80TTB of the Act in respect of interest earned on savings bank account or fixed deposit account with a bank or interest earned on savings bank account with post office.

(c) A standard deduction from the family pension is allowable to the extent of Rs 15,000 or 1/3rd of such family pension, whichever is lower, for assessment year 2019-20. A deduction in respect of pension income to the extent of Rs 40,000 is allowable for assessment year 2019-20. 

(d) The deduction under Section 80TTB of the Act to the extent of Rs 50,000 is allowable only to a senior citizen for assessment year 2019-20. The amount of deduction admissible under Section 80TTA of the Act is not available for assessment year 2019-20.

(e) A deduction for medical expenditure to the extent of Rs 50,000 is allowable to a senior citizen. Monthly allowance for medical expenditure is not allowable as deduction u/s 80D.