Personal Finance

Your Taxes

Sanjiv Chaudhary | Updated on June 16, 2019 Published on June 16, 2019

I am a retired government servant paying income tax. My income is from pension and interest (SB). In the previous financial year, I invested ₹1.5 lakh in MFs for saving tax. Besides, I also purchased shares for ₹80,000 and sold the same at a loss, at ₹45,000. What shall be the tax treatment in respect of the above transactions, and which I-T form should I use while submitting my returns?

SC Saxena

I understand you receive monthly pension for your past employment with the government. As per the provisions of the Income Tax Act, the uncommuted pension received by you will be taxable as salary income at the tax slab rates applicable to you.

In relation to the savings bank interest income, the same is taxable in your hands subject to a deduction of up to ₹50,000 available under Section 80TTB (for resident senior citizens who is of the age of 60 years and more) of the I-T Act.

For individuals below 60 years of age or non-residents, a deduction against the savings bank interest income of up to ₹10,000 is available under Section 80TTA.

Further, a loss on sale of shares (being a capital loss) can be set off against the profit on sale of a capital asset only.

However, please be advised that though a short-term loss can be set off against a long- or a short-term gain, a long-term loss can be set off only against a long-term gain.

In case you do not have gains to set off the loss in the same year, the same can be carried forward to the next year.

I have health insurance, the premium amount of which I claim U/S 80D. Recently, I underwent a cataract surgery by incurring expenses of ₹45,000, whereas the insurer paid me just ₹24,000 as per the policy sub-limit. Can I consider the balance amount of ₹21,000 as being exempt from taxable income?

Shrikanth Mahajan

As per the provisions of Section 80D the I-T Act, medical expenditure incurred on yourself is available as a deduction only if you qualify as a senior citizen (aged 60 years or more during the relevant financial year) and you do not hold any medical insurance.

Since you already hold a medical/health insurance, you shall not be eligible to claim deduction for the medical expenditure incurred.

You shall be eligible to claim deduction for the medical insurance premium paid for such medical insurance policy as per the limits prescribed under the I-T Act.

The writer is a practising chartered accountant. Send your queries to [email protected]

Published on June 16, 2019
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