Can I claim a tax exemption on expenses for the treatment of my ailing father?
My father has been suffering from Parkinsons Disease. I have spent more than Rs 1 lakh in 2007-08 for his treatment. I understand I can claim tax exemption on this expense under Section 80DDB of the Income Tax Act. Please let me know whether I can claim exemption on the whole amount. If so, how?
Experts at Astute Consulting note that if you incur expenses on medical treatment for either yourself or a dependent, and if you (the assessee) are a resident in India, the expenses qualify under Section 80DDB, provided the ailment is specified under Rule 11DD. Parkinsons Disease is indeed covered by Rule 11DD, so you are entitled to a tax benefit.
The exemption, however, is limited to Rs 40,000 or actual expenses for the year, whichever is less. However, the exemption is up to Rs 60,000 if the person undergoing the medical treatment was 65 years or older for any portion of the previous year.
Please note that the amount of exemption will be reduced by any amount received as insurance from your insurer, or reimbursement by your employer for the medical treatment.
To avail of the tax benefit, you need to provide a certificate from a specialist working in a government hospital, as well as the return of income in Form 10-I. If the specialist is not posted in a government hospital, the certificate with the prior approval of the head of that hospital, may be issued by any other specialist working full-time in that hospital, and having a postgraduate degree in general or internal medicine, which is recognised by the Medical Council of India.
Please note that the amount of exemption will be reduced by any amount received as insurance from your insurer, or reimbursement by your employer for the medical treatment.
To avail of the tax benefit, you need to provide a certificate from a specialist working in a government hospital, as well as the return of income in Form 10-I. If the specialist is not posted in a government hospital, the certificate with the prior approval of the head of that hospital, may be issued by any other specialist working full-time in that hospital, and having a postgraduate degree in general or internal medicine, which is recognised by the Medical Council of India.
I have been working in Kuwait since 2005. For the past three years, I have been continuously out of India. Now my job requires me to work in India for one week, and out of India every 40 days. My first visit to India starts on May 1, 2008. Am I right in presuming that I still meet all the conditions for non-resident Indian (NRI) status?
Experts at Astute Consulting note that your residential status depends on the period of residence in India. It can be calculated as follows.
You are a Resident for tax purposes if you stay in India for 182 days or more in a financial year; or if you stays in India for 60 days or more in a financial year and 365 days or more in the preceding four years. The period of 60 days is replaced with 182 days if you leave India as a crew member of an Indian ship, or for employment outside India. If you dont fulfil either of the above two conditions, you are considered an NRI for tax purposes.
Based on the information you have provided, you will be out of India for 40 days, and in India for seven days. So your stay in India will be around 54 days until March 31, 2009, considering that your stay in India begins on May 1, 2008. Since your stay in India will be less than 60 days this financial year, you will be considered a non-resident for tax purposes.
You are a Resident for tax purposes if you stay in India for 182 days or more in a financial year; or if you stays in India for 60 days or more in a financial year and 365 days or more in the preceding four years. The period of 60 days is replaced with 182 days if you leave India as a crew member of an Indian ship, or for employment outside India. If you dont fulfil either of the above two conditions, you are considered an NRI for tax purposes.
Based on the information you have provided, you will be out of India for 40 days, and in India for seven days. So your stay in India will be around 54 days until March 31, 2009, considering that your stay in India begins on May 1, 2008. Since your stay in India will be less than 60 days this financial year, you will be considered a non-resident for tax purposes.
I filed my tax return for the 2006-07 financial year in June 2007. I would like to make some corrections and file a revised return. What is the time limit for filing revised returns? Are there any restrictions?
Advisors at Astute Consulting note that some conditions need to be met for filing revised returns. First, returns filed by the due date specified in the Income Tax Act, 1961, can be revised. Since you filed your on time, you can revise your return. Second, a revised return can be filed to correct any omissions or wrong statements. And third, the revised return can be filed any time within a year from the end of the relevant assessment year, or before completion of the assessment, whichever is earlier. So, for example, for the financial year 2006-07, the revised return can be filed within a year from end of the assessment year 2007-2008, that is, it must be filed before March 31, 2009. But if the assessment is completed before March 31, 2009, you will not be able to file a revised return.
I recently sent my son to another city for his education, and will be paying Rs 2,000 a month as hostel charges. My employer is ready to pay me an allowance for this expense. Would this allowance be exempt from tax?
Experts at Astute Consulting note that a hostel allowance paid to you by your employer, for your children studying and living in a hostel, is exempt upto Rs 300 per child per month, for up to two children. In your case, you can claim exemption on Rs 3,600 a year.
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