The Telegraph
Monday , March 8 , 2010
Since 1st March, 1999
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Health check
Can I claim deduction under Section 80DD for medical expenses for my sister? My father is earning pension?
Deepak Nag, Purulia
Yes, you can. The deduction under Section 80DD is for dependent of an individual taxpayer. The ‘dependent’ as explained under the section in the case of an individual includes the spouse, children, parents, brothers and sisters of the individual or any one of them. What you need is to get an undertaking from your father that your sister is dependent on you and not on him.
Liability concern
I have a demat account in the name of three persons, including my wife and my father. Who will be liable to pay capital gains tax, short term or long term, if arises?
Chandra Pal, Belur
The basic premise on which the tax will be charged is that the securities belong to him/her who pays for its purchase. In the case of sale of those securities, any capital gain or loss, short term or long term, will accrue to him/her. Thus, if you had provided the fund for the purchase of securities in the demat account, the tax liability will be yours.
Surrender plans
I had taken a unit-linked pension plan from a private sector life insurance company in March 2008. The term of the plan is 27 years. If I surrender the policy after 10 years, what will be the tax implication?
Sumit Ghose, Behala
sion plans are not life insurance products. Whatever you receive from a pension plan, even on maturity, is not tax-free unlike life insurance products. But since the pension plan comes with tax benefits under Section 80CCC, it means that the scheme has been approved under Section 10(23AAB) of the Income Tax Act. It means that units are capital assets and, if surrendered, gives rise to long-term capital gains. Besides, if you have claimed the tax benefit under Section 80CCC on the premium payment, then the surrender value will be treated as income in the year of withdrawal in your hand and tax will be applicable.
If you have any queries about investing or taxes or a high-cost purchase you are planning, mail to:, or write to: Business Telegraph, 6 Prafulla Sarkar Street, Calcutta 700 001.
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