YOUR QUERIES: INCOME TAX: Senior citizens can claim tax deduction on medical expenses up to Rs 50,000

August 10, 2021 2:00 AM

According to Section 80D of the Income Tax Act, senior citizens may avail a deduction of up to Rs 50,000 for payment of premium towards medical insurance policy.

Since shares are considered “movable property”, it is not mandatory to execute a gift deed.Since shares are considered “movable property”, it is not mandatory to execute a gift deed.

By Chirag Nangia

I retired in November 2020 and took a Mediclaim Policy in February 2021. In between, I have incurred some medical expenses on preventive health check ups, doctors’ consultation fees and dental treatments. Can I claim tax exemption on these expenses (incurred out of my own pocket) after retirement, and before taking any medical insurance cover, and under which Section of 80D? Further, can the cost of medicines also be included for tax exemption under medical expenses for Section 80D?
—A Sen
According to Section 80D of the Income Tax Act, senior citizens may avail a deduction of up to Rs 50,000 for payment of premium towards medical insurance policy. This limit includes expenses incurred on preventive health checks subject to the internal limit of `5,000. However, if no amount is paid as premium on health insurance, medical expenses incurred by such senior citizens may be claimed under Section 80D, subject to the monetary cap of Rs 50,000. To claim deduction, all the medical expenditure must be paid in any other mode other than cash (i.e. via channels such as credit card, debit card, and net-banking or other digital channels). Medical expenses may include medical consultations, medicines, hospitalization expenses, etc. Accordingly, for FY 2020-21, you either claim deduction of medical expenses incurred or health insurance premium paid, subject to the ceiling of Rs 50,000.

I am a senior citizen. I want to transfer some shares to the Demat accounts of my daughter and NRI son as a gift. I will inform them of this transfer through email, with advice to preserve the message to be shown to any authorities, if and when required. Is it sufficient to avoid any difficulty in future?
—Rakesh Saxena
Since shares are considered “movable property”, it is not mandatory to execute a gift deed. However, in order to create a legal record, it is best to execute one. A simple acknowledgement may also serve the purpose. Further, please note that capital instruments are permitted to be transferred to NRI by way of gift subject to satisfaction of certain conditions and guidelines of RBI in this regard.

The writer is director, Nangia Andersen India. Send your queries to fepersonalfinance@expressindia.com

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