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Can I switch to growth option in ELSS and claim 80C tax benefit after lock-in ends?

After the lock-in ends, if one switches to growth plan, the amount invested in it will be considered as fresh investment and will be eligible for deduction.

ET Bureau|
Updated: May 28, 2018, 04.13 PM IST
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Switch from dividend plan to the growth plan is regarded as fresh investment in the new scheme.
Query: I invested in Axis Long Term Equity Fund's dividend option in 2013 and availed of Section 80C benefit. As the three-year lock-in is now over, I want to switch partly to the fund's growth option. Will I still be able to avail of the Section 80C benefit?

Homi Mistry Partner, Deloitte India replies :
Deduction is allowed under Section 80C for investment in equity-linked savings schemes (ELSS), subject to a three-year lock-in. Further, switch from dividend plan to the growth plan is regarded as fresh investment in the new scheme. Since you have completed the three year lock-in period, if you switch to Axis Long Term Equity Fund's growth plan, the amount invested in it will be considered as fresh investment and will be eligible for income tax deduction.

Query: I am 85 years old and have been suffering from knee and back pain. I purchased an ointment worth Rs 10,000 and have been spending Rs 2,000 per month for back massages. Can I claim tax deduction of Rs 30,000 towards these medical expenses?

Amit Maheshwari Partner, Ashok Maheshwary and Associates replies
: If you are not covered under a health insurance plan, you can claim a deduction of Rs 30,000 towards your medical expenses under Section 80D. Further, from 1 April onwards, tax deductible amount has been increased to Rs 50,000. So, you can claim a deduction of up to Rs 30,000 for expenses incurred up to 31 March 2018 and, for expenses incurred after 31 March 2018, you can claim a deduction of up to Rs 50,000 in 2018-19.

Query: I am a postgraduate medical student. I will be receiving a stipend of Rs 55,000 per month for three years. Will I be liable to pay tax?

Rakesh Bhargava Director, Taxmann replies :
Scholarships granted to students to meet their cost of education are exempt from tax, according to Section 10(16) of the Income-Tax Act. If the stipend received by you is not in the form of a scholarship, you will be liable to pay tax on it. Such stipend income should be reported under the head 'salary', if there is an employer-employee relationship, and as professional income if there's no such relationship.

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