Senior citizens enjoy some additional advantages over other taxpayers when it comes to income tax. Besides the income tax roundups that are exclusively designed for seniors, the ITR electronic filing process is also easier for them.
In accordance with applicable law, for income tax purposes, an elderly person is a natural person residing between the ages of 60 and 80 on the last day of the preceding financial year. Those over 80 are called super seniors and have a few extra benefits.
Here are seven tax benefits available to seniors.
Medical insurance benefits
Under Section 80D, the elderly are offered a deduction of up to Rs 50,000 for payment of health insurance premium.
Basic exemption benefit
Individuals, who fall within the taxable income bracket, are allowed certain basic exemptions. However, for the elderly, the government has granted a basic exemption limit of up to Rs 3 lakh and for those taxable between Rs 3 and 5 lakh, the rate of tax is only 5%.
No advance tax payment is required
Seniors who do not own a business are exempt from paying withholding tax and only pay a flat tax on all their income.
Non-deduction of TDS on interest
In the event that a senior’s total income is exempt from income tax and no tax is owed by him for that fiscal year, he can simply submit Form 15H for non-deduction of TDS on interest earned on term deposits.
Higher deduction under section 80DDB for a specified illness
Section 80DDB provides a tax deduction to taxpayers for expenses for the medical treatment of specified illnesses. The deduction limit is up to Rs 1,00,000 for the elderly.
Interest income exemption up to Rs 50,000
Under Section 80TTB, elderly people are entitled to a deduction of up to Rs 50,000 on interest earned on various savings.
Tax Exemption under the Reverse Mortgage Scheme
If a senior chooses to mortgage one of their homes for the purpose of earning monthly income, the amount paid in monthly installments to the homeowner (senior) is exempt from income tax.
(Edited by : Shoma Bhattacharjee)