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T. Banusekar

WOULD long-term capital gains be treated as part of total income for computing the percentage of rebate that an assessee can claim under Section 88 given that long-term capital gains is excluded in computing the rebate under Section 88?

RM. Ramiah

Reply

Section 112 of the Act provides that the total income shall be reduced by the amount of long-term capital gains and the total income so reduced shall alone be eligible for rebate under Section 88.

As a result, long-term capital gains, does not qualify for the rebate under Section 88.

This part of Section 112 does not seek to confer a benefit on an assessee but on the other hand seeks to disable an assessee from making a claim for rebate under Section 88 against the long-term capital gains.

It would not be permissible to interpret this in such a manner as to say that long-term capital gains will not form part of the gross total income for the purpose of determining the percentage of rebate that can be claimed by an assessee.

At any rate, Section 112 does not provide for the long-term capital gains as not forming part of the gross total income. The long-term capital gains of an assessee will have to be included as part of the gross total income in computing the percentage of rebate that can be claimed under Section 88.

Query

Are incomes that are exempt such as interest from PPF account etc, to be taken into account as part of gross total income in computing the rebate under Section 88?

Ashok Kumar

Reply

Incomes that are exempt will not form of part of gross total income and therefore in computing the percentage of rebate the same will have to be excluded.

Query

I am a senior citizen eligible for rebate under Section 88B of the Act. My income other than from long-term capital gains is Rs 90,000 and my income by way of long-term capital gains is Rs 85,000, for the previous year 2003-2004 (assessment year 2004-2005).

Can I claim the rebate that I am eligible for as a senior citizen under Section 88B against the tax on both my regular income and long-term capital gains? On the balance of tax if any payable, can I claim the rebate under Section 88?

P. S. B. Shenoy

Reply

The rebate under Section 88B is available to an individual who is resident of India and who is of the age of 65 years or more at any time during the previous year.

The rebate that can be claimed under the section for the assessment year 2004-2005 is the tax payable or Rs 20,000, whichever is lower.

There is no prohibition on claiming this rebate against the tax on long-term capital gains. Section 112 only prohibits the claiming of a rebate under Section 88 against the tax on long-term capital gains.

The reader can, therefore, claim the rebate under Section 88B against the tax on long-term capital gains. On the tax on regular income, that is, the income other than long-term capital gains, he will be eligible for the rebate under Section 88.

Query

I have suffered from a heart attack and undergone an emergency angioplasty. I have since been readmitted due to other complications of the angioplasty. I am presently taking expensive vitamin tablets and protein powder.

Am I entitled to the deduction under Section 80DDB in respect of the medical treatment and the post medical vitamin tablets and protein powder?

S. Kanagavel

Reply

The deduction under Section 80DDB is available to individuals and HUF's who have incurred any medical expenditure on the treatment of certain diseases or ailments.

The deduction is available in the case of an individual if he has incurred the expenditure on himself or a dependent relative and in case of HUF on any member of the family.

The deduction would be Rs 40,000 and in case of senior citizens Rs 60,000 or the sum actually spent whichever is less. The specified diseases and ailments for this purpose are:

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