Mrs X is disabled due to severe paralysis. He has two sons A & B and husband Y. Both sons spend Rs. 55000/- each on her medicines and Rs. 85000 each on her msintenance. Her hisband spend Rs. 150000/- on her maintenance. RS. 70000/- are spent on medicines from her own income. How should individuals claim in their returns

Ans: Hi Rajan

As the owner of the land is your father, the taxability would apply to him alone and not to you or your brother.

The query would need further clarity in terms of the following aspects:

Whether this was an agricultural land?
What is the distance of the land from the nearest municipality jurisdiction?
What is the population of the place where the land is located?

In case this is an urban non-agricultural land then you may need to get the valuation report for the land as on April 1, 2001 from an Income Tax approved valuer. This would become your basic cost reference on which you would need to apply indexation. An example is stated below for easy understanding.

Suppose the valuation report brings out a value of Rs. 20 Lakhs as on April 1, 2001

Current Cost Inflation Index (CII) is 331 and base year (2001) index is 100

So indexed cost of acquisition would be Rs. 20 Lakhs x 331 / 100, which is Rs. 66.20 Lakhs

So capital gain would be Rs. 75 Lakhs - Rs. 66.20 Lakhs = Rs. 8.80 Lakhs on which your father would need to pay 20+% of tax.

As this is a regular asset, in case he wants to pay NIL tax then he would need to reinvest the full sale consideration in some eligible asset such as residential house or capital gains bonds (go-downs / shops are not eligible assets).

If he reinvests in eligible asset partially then he would get exemption only proportionately. Taking the same example:

Suppose he reinvests Rs. 50 Lakhs in capital gain bond (say NHAI or REC) then the eligible proportionate exemption would be as follows:

Rs. 50 Lakhs / Rs. 75 Lakhs x Rs. 8.80 Lakhs = Rs. 5.87 Lakhs

He would need to pay the 20+% tax on Rs. 2.93 Lakhs. He would be eligible to marginal relief provisions if his pension income is not substantial. Also, he may end up with Nil tax if his total income is below Rs. 5 Lakhs

Ans: Income tax allow deduction for amount paid to "parents" and "father in law" does not fall in the category of parents so deduction will not be allowed.

Ans: Congratulations on the upcoming addition to your family! It’s great that you and your wife have corporate insurance to help cover the delivery costs. Let’s explore the best way to utilize both insurances effectively.

Understanding Corporate Insurance Claims
Corporate health insurance policies typically have specific rules and procedures for claims. It’s crucial to understand these to maximize your benefits. Here’s a step-by-step guide to help you navigate the claims process:

Cashless Claim Option
Cashless claims are convenient as they reduce the immediate financial burden. However, there might be restrictions when using multiple policies for a single claim.

Reimbursement Option
Reimbursement claims require you to pay the hospital bills upfront and later submit the bills for reimbursement from your insurers.

Strategy for Maximizing Insurance Benefits
Option 1: Using Cashless and Reimbursement Together
Cashless Claim with Your Wife's Insurance:

Since your wife’s insurance covers up to Rs 70,000, you can opt for a cashless claim for this amount.
Inform the hospital in advance about the cashless claim using your wife’s insurance.
Reimbursement Claim with Your Insurance:

For the remaining amount, you can pay out of pocket and later submit the bills to your insurance for reimbursement.
Ensure you get detailed and itemized bills from the hospital to avoid any issues during the reimbursement claim.
Option 2: Full Payment and Dual Reimbursement Claims
Pay the Total Amount by Cash:

Pay the entire hospital bill upfront by cash or card.
Submit Bills for Reimbursement to Both Insurers:

First, submit the bills to your wife’s insurance to claim the maximum allowed amount (Rs 70,000).
Once the claim is processed, submit the remaining bills to your insurance to claim up to Rs 50,000.
Clearly indicate to your insurance that your wife’s policy has already covered part of the expenses.
Recommended Procedure
Step-by-Step Process
Contact Both Insurers:

Reach out to both your insurance providers to understand their specific claim processes and requirements.
Confirm if they accept combined claims and get clarity on the documentation needed.
Pre-Authorization for Cashless Claim:

For a cashless claim using your wife’s insurance, obtain pre-authorization from the insurer. This typically involves submitting a pre-authorization form to the hospital, which then coordinates with the insurer.
Documentation:

Collect all necessary documents, including the hospital bill, discharge summary, and any other medical reports.
Ensure the bills are itemized and clearly mention the amount paid.
Submitting Reimbursement Claims:

After your wife’s insurance processes the cashless claim, submit the remaining bills to your insurance for reimbursement.
Include a cover letter explaining that the initial claim was processed by another insurer and attach a copy of the claim settlement.
Additional Tips
Keep Track of Communication
Maintain a record of all communications with your insurers and the hospital. This includes emails, phone calls, and any written correspondence.
Follow Up
Regularly follow up with both insurers to ensure your claims are being processed. Prompt follow-ups can help avoid delays.
Seek Clarification
If any part of the claim process is unclear, don’t hesitate to seek clarification from your insurers. It’s better to address any doubts upfront to avoid complications later.
Conclusion
Using both corporate insurances effectively can significantly reduce your out-of-pocket expenses for the delivery. By opting for a combination of cashless and reimbursement claims or full payment followed by dual reimbursement claims, you can maximize your insurance benefits. Ensure you communicate clearly with your insurers, follow their procedures, and keep detailed records to facilitate smooth claim processing.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner,

www.holisticinvestment.in

Ans: 01. In reference to F/Y 2024-25 :
Funds (Rs.6.00 (L) received from her mother is not an Income but Gift, so not taxable. Similarly amount received from her husband Rs.1.65 (L) is again not a Income, hence not taxable.
Her only taxable income is Rs.1.90 (L) for which you would be filing her ITR. There should not be any tax liability in this case.
Most welcome for any further clarifications. Thanks.