The Buyt Desk
Income Tax Department India provides some special Income Tax benefits for Senior Citizens. Even the e-filing process of income tax is made hassle-free for them.
There are a few tax benefits exclusively for senior citizens to ease their post-retirement life. These tax benefits help them to save more from their earnings. They get more exemptions on investments and insurance as well. Apart from this, even the process of e-filing income tax is made hassle-free, especially for senior citizens.
Who are Senior Citizens in India?
As per Indian Income Tax laws, an Indian, as on the last day of the previous financial year aged between 60 to 80 years is a senior citizen.
Why are special privileges given to Senior Citizens?
India has a rich cultural background. Indian history loudly speaks about the culture of respecting elders and loving them. Elders guide the younger generation and be there for them in good and bad times. The Indian government works on this cultural base and moral values. To keep the culture intact, it has come up with special income tax benefits for aged individuals. The government’s intention is to support citizens in this phase of life and relieve them from stress. Check the tax benefits for senior citizens before planning their funds. Let us understand the income tax benefits offered to senior citizens
What are the income tax benefits offered to senior citizens?
Different tax-slab rates – Every Indian citizen who has an earnings should pay tax. Based on income there are different tax slabs. But all are allowed some elementary waivers as below. You can see that senior citizens and super senior citizens have more waivers compared to other individuals so that they do not have to pay higher taxes.
|
Tax free |
5% tax |
|
|
Non senior Indian |
Up to Rs 250000 |
250000 to 500000 |
|
Senior Indian |
Up to Rs 300000 |
300000 to 500000 |
|
Super senior Indian |
Up to Rs 500000 |
NA |
No tax on earnings from the reverse mortgage scheme – Reverse mortgage scheme is a plan made for senior citizens. Under this, a senior citizen who has mortgaged his/ her house for life will get regular payments while he /she will have ownership and possession of the house. And on the death of the borrower, the property is sold and the loan is repaid along with interest. And after adjusting against the loan, the remaining balance is passed on to the legal heirs. The instalments/ payments the senior citizen gets under this scheme are tax exempted.
Interest income exemption up to ₹50,000 – There is a section 80TTB in the Income Tax Act that allows a deduction of Rs 50000 earned as interest. Only the interest amount earned beyond Rs 50000 is taxed as per the income tax slab. If you are taking benefit of section 80TTB, you are not allowed deductions of Rs 10000 under section 80TTA.
Need not pay advance tax – Senior citizens who are without any business income get exemption from advance tax payment. They only have to pay self-assessment tax on their total income.
No deduction of TDS on interest – If a senior citizen’s total income is tax exempted and no tax to be paid for that financial year, then he /she can submit Form 15H which is for non-deduction of TDS on interest earned from fixed deposits. Even under section 194A, the tax deduction is Rs 50000 for senior citizens.
Deduction for medical insurance premium payments – Under Section 80D, senior citizens will get extra Rs 25000, which accounts for Rs 50000 deduction on medical insurance premium payments. For super senior citizens, even the expenditure incurred on treatment will be taken into account for a Rs 50000 deduction along with a premium.
Standard deductions from Pension income – Senior citizens who are Pension getters are allowed a standard deduction of Rs 50000 income earned through a pension.
Deduction for specified illness – Under section 80DDB, there is a tax deduction for specified illness. This is a relief for senior citizens as expenditure on medical treatment of specified diseases gets tax deductions. Under this, expenditure up to Rs 100000 is allowed for deduction.
Filing Income Tax Return benefits – Income Tax Return for Super Senior Citizens can be filed through either Sahaj (ITR 1) or Sugam (ITR 4). And it can be done either manually or by e-filing.
