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Whether we like it or not, we all worry about the future and considerably make choices to save and invest money to have a secure tomorrow. Consequently, much of what we do today helps contribute to our growth and the country’s overall growth.
However, don’t you think there should be some income tax benefits for taxpayers over the age of 60 who’ve already given a lot in their younger days? So, let’s talk about some of these Income Tax Benefits for senior citizens.
According to the law, a senior citizen is an individual resident between the age group of 60 to 80 years at any time during the respective financial year.
A super senior citizen is an individual resident whose age is 80 years or above, at any time during the respective financial year.
India’s history hails from a culturally enriched background where elders are paid respect and love. They are cared for to guide the generations on happy and odd events.
The government is working in tandem to keep the culture and moral values intact and offer special income tax benefits for senior citizens. Their idea is to relieve them from stress at this phase of life. Suppose you or your senior citizen parents are planning their funds. In that case, knowing about the tax benefits for senior and super senior citizens that can be availed is crucial.
Here are some exemptions, deductions and benefits that may ease financial responsibilities for taxpayers over 60 years.
Every individual in India, who falls under the income bracket to pay tax, is allowed some elementary waivers.
For senior citizens, the government has increased this basic exemption limit up to ₹3 lakhs under both tax regimes, effective April 1, 2023.
Super citizens get a higher advantage, considering their income and age. For them, this waiver is of up to ₹5 lakhs under the old tax regime in one financial year. Under the new regime, however, the basic exemption limit is up to ₹3 lakhs.
Other than the senior or super citizens, this exemption for ordinary citizens is up to ₹2,50,000/- only, which leads them to pay more taxes.
Under section 80D, senior citizens are offered a benefit on account of payment of the health insurance premium up to ₹50,000. Super senior citizens who are not medically insured can also enjoy this benefit.
For super citizens, under section 80D, the deduction for the payment of medical premium as well as the actual expenses incurred on their treatment are allowed.
Know more about: Health Insurance Tax Benefits
Senior citizens who are residents of India will have to pay no tax on their interest earned up to ₹50,000 in a financial year.
Applicable under section 80TTB of Income Tax, this will consider interest earned in the savings bank account, deposits in a bank, and/or deposits in the post-office. When filing their Income Tax Return, senior citizens must fill the form 15H.
Also, Section 194A provides senior citizens with the benefit of a higher TDS deduction on interest payments of up to ₹ 50,000 by the bank, post office or cooperative bank. This limit is ₹ 40,000 for non-senior citizens.
Budget 2021 introduced a Section 194P, under which senior citizens aged 75 and above are exempted from filing the ITR if they fulfil the following criteria:
They have income only from their pension.
They receive income from interest and pension in the same bank account.
They have furnished a declaration form 12BBA to the specified bank.
While individuals below the age of 60 have to pay an advance tax if their tax liability is ₹10,000 or more in a financial year, senior citizens are free from this burden unless they make income from business or profession.
The Indian government allows individual taxpayers and dependent relatives below the age of 60 not to pay tax if medical treatment costs close to ₹40,000.
For dependent senior and super senior citizens, this deduction limit is up to ₹1 lakh if they undertake any treatment for a specified disease/critical illness in a financial year, as per Section 80DDB of the Income Tax Act.
Super Senior Citizens (individuals above 80 years) can file for their Income Tax Returns through either Sahaj (ITR 1) or Sugam (ITR 4). They can choose to do it either manually or electronically.
Senior citizens may reverse mortgage on any of their accommodations to make monthly earnings. The ownership of the property remains with the senior citizen, and they are given monthly payments for it. The amount paid in instalments to the owner is exempted from Income Tax.
Senior citizens are allowed a standard deduction of ₹50,000 for their pension income, including family pensioners who can avail of deduction benefits up to Rs 15,000.
Also, individuals can check out the income tax slabs for senior and super senior citizens for FY 2022-23 and FY 2022-23.
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Disclaimer: This information is added only for informative purposes and collected from different sources across the Internet. Digit Insurance is not promoting or recommending anything here. Please verify the information before making any decisions.
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