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Posted at: Oct 21, 2019, 6:54 AM; last updated: Oct 21, 2019, 6:54 AM (IST)TAX ADVICE

Physiotherapy cost not ‘medical expenditure’

SC Vasudeva

Q.  Are expenses incurred on physiotherapy of a senior citizen considered as medical expenditure and qualify for deduction under Section 80 D? If so, what are the documents required to claim that?  — Manjit Singh 

The term 'medical expenditure' has not been defined by the Act.  However on the basis of the dictionary meaning, 'medical' means 'science of medicine'. Therefore, it seems that the term 'medical expenditure' used in Section 80D would cover expenditure on the medicines purchased for the use of the assessee or any amount paid to doctor for consultations who has prescribed the such medicines.  In my view, therefore, the expenditure on physiotherapy would not be covered within the term ‘medical expenditure’.

Q. I have worked in the UK for some years. Now, I am drawing pension of Rs 20,000 per month. Is it  taxable under Indian laws?  If exempted, under which section can I claim exemption?

— Dr Ashok Kumar Gupta

The amount of pension received by you in India would be taxable provided you are a resident in India in accordance with the provisions of Section 6 of the Income Tax Act 1961 (The Act).  A person is considered to be a resident in India in any previous year if he is;

(a) in India in that year for a period/periods amounting in all to 182 days or more; or

(b) having within the four years preceding that year in India for a period / periods amounting in all to 365 days or more, is in India for a period / periods amounting in all to 60  days or more in that year.

Therefore, you satisfy either of the above condition, you will be considered a person who is a resident in India and amount of pension received in India would be taxable in India.

Q. I sold my agricultural land and house in Himachal Pradesh for a total consideration of Rs10,00,000. The house was built in 1998-1999 (rate applicable: Rs 28,129) and the value of the house is calculated to be Rs6,62,437 (28129×23.55= Rs6,62437). The circle rate in respect of rural area falling on other roadside during the period April 1, 2018 to March 31, 2019, is Rs 114 per sq m. The value of land plus house as per above rates mentioned in the sale deed is Rs7,92,300. The sale consideration is Rs10,00,000. Am I liable to pay capital gain tax on the sale consideration? If so, how much will be capital gain and the tax payable? — BS Pathania

You have not clarified whether the agricultural land sold by you was beyond the distance of 8 km from the jurisdiction of the notified area committee.  Presuming that the agricultural land was beyond the distance of 8 km from the notified area committee, the agricultural land would not be covered within the definition of term “capital asset” and no tax on the sale of such land would be leviable.  However in case the agricultural land is situated within the distance specified hereunder, it will be treated as a ‘capital asset’:-

(a) in any area within the distance, measured aerially, 

i) not being more than 2 km, from the local limits  of any municipality, municipal corporation, notified area committee, town area committee, town committee or by any other name or cantonment board and which has a population of more than  10,000 but not exceeding  1 lakh; or

ii) not being more than 6 km, from the local limits  of any municipality, municipal corporation, notified area committee, town area committee, town committee or by any other name or cantonment board and which has a population of more than 1 lakh but not exceeding  10 lakh; or

iii) not being more than 8 km, from the local limits  of any municipality, municipal corporation, notified area committee, town area committee, town committee or by any other name or cantonment board and which has a population of more than  10 lakh.

In case the agricultural land is so situated, it would be treated as a 'capital asset' and profit arising on sale of such a land would be eligible to tax. In such a case, fair market value of the agricultural land as on April 1, 2001, would be required so as to ascertain the indexed cost thereof as on the date of sale.  In absence of these details, it is not possible to compute tax, if any leviable on the profit arising on the agricultural land sold by you.

It is not possible to compute tax on the profit arising on the sale of house as fair market value of such house as on April 1, 2001, has not been indicated.  This will have to be ascertained so as to compute the indexed cost of the house as on the date of sale.  The computation of capital gain, if any, would also require the details with regard to sale consideration of the house and area of the land beneath such house. 

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