I am a 70-year-old retired government employee, while my wife is more than 65 years of age. About 14 years ago, our daughter took out a mediclaim policy in our names and had been paying the premiums regularly. Now, she is unemployed and finds it difficult to pay the premiums. Can I pay the premium and claim income tax (I-T) benefits under section 80C?
—Jeyaseelan
Based on the information provided by you, we understand that medical insurance policy was taken by your daughter for you and your spouse and such payments were claimed as deduction under section 80D of the I-T Act, 1961, by your daughter.
As per the current provisions of the section, an individual taxpayer is eligible for claiming deduction up to the prescribed limit (being ₹50,000 in your case wherein you and your spouse are 60 years or more) in respect of payment made towards medical insurance policy taken for self, spouse, dependent children.
Since going forward, you shall be making the payments for the medical insurance premium, you should be eligible to claim the available deduction in respect of medical insurance premium paid, under section 80D (and not 80C) of the Act, up to a maximum limit of ₹50,000 per annum.
It is important to note that the deduction is available only in case where the payment is made by way of any mode (other than cash).
The modalities if any for changing the proposer’s name from your daughter to yourself should be separately checked with the insurance company.
I am a retired senior citizen and my wife is a homemaker. We have three demat accounts: one each for us and a joint account. Irrespective of whether I sell shares from my account or the joint account, the long-term capital gains (LTCG) are registered in my tax returns. Is there any way whereby my wife can show the gains in her income tax return (ITR) if we sell shares from the joint account?
—Name withheld on request
Based on the limited information available, it is presumed that the funds invested in the securities held in all the three demat accounts (individual as well as joint) belong to you, as you mentioned your wife is a homemaker.
As per the provisions of the Income-tax Act, 1961, income arising directly or indirectly to the spouse of an individual, from the assets transferred by the individual (for nil consideration or inadequate consideration), shall be included in the income of that individual (and not the receiving spouse) for the purpose of income tax.
In view of the above, even though your wife is a joint account holder in the demat account, the income arising from the investments therein (dividend/ capital gains etc.) shall be considered as taxable income in your hands and will need to be included in your tax returns.
Parizad Sirwalla is partner and head, global mobility services, tax, KPMG in India.