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According to recent estimates from the United Nations Population Division, the total number of Indians aged 60 years and above is predicted to reach 19% of the country’s total population by 2050.
This prediction pegs the total number of senior citizens in the country at 323 million. Going by this data, the next pressing question that arises is the consequent economic, social and more importantly, healthcare challenges.
Taking such liabilities under consideration, the exemption limit on taxation for senior citizens and super senior citizens has been revised since the assessment year 2015-2016. Further, the income tax benefits for senior and super-senior citizens are also significantly higher than that for individuals below 60 years of age.
But who are considered senior and super senior citizens in India?
Let us take a look.
According to the law, a senior citizen is an individual resident between the age group of 60 to 80 years, as on the last day of the previous financial year.
A super senior citizen is an individual resident who is above 80 years, as on the last day of the previous financial year.
The tax liabilities for senior citizens are calculated on the basis of their salary, house rent and fixed allowances, alongside other income sources.
Now, assuming that most senior citizens in India do not have a steady source of income, they are eligible for a higher exemption limit than those below 60 years of age. This exemption limit stands at up to Rs. 3 Lakh for individuals above 60 years of age.
Following is an illustration of the income tax rates for senior citizens in India:
|
Income Tax Slabs |
Rate of Tax |
|
Individuals with income of up to ₹3 Lakh |
Not applicable |
|
Individuals with income between ₹3 Lakh and ₹5 Lakh |
5% |
|
Individuals with income between ₹5 Lakh and ₹10 Lakh |
20% |
|
Individuals with income exceeding ₹10 Lakh |
30% |
There is an additional health and education cess of 4% over the applicable tax slab.
There is also an additional surcharge over the applicable tax rate for individuals with an income above Rs. 50 Lakh.
This is as follows:
The tax liabilities for senior citizens are calculated on the basis of their salary, house rent and fixed allowances, alongside other income sources.
Now, assuming that most senior citizens in India do not have a steady source of income, they are eligible for a higher exemption limit than those below 60 years of age. This exemption limit stands at up to Rs. 3 Lakh for individuals above 60 years of age.
Following is an illustration of the income tax rates for senior citizens in India:
Similar to tax liability on senior citizens, the tax on individuals above 80 years of age is also calculated on the basis of income generated from various sources like pension, interest on savings, fixed deposits, post office schemes, reverse mortgages, etc.
Following is a table illustrating the income tax slabs for super-senior citizens in India:
|
Income Tax Slabs |
Rate of Tax |
|
For individuals with income of up to ₹5 Lakh |
Not applicable |
|
For individuals with income ranging between ₹5 Lakh and ₹10 Lakh |
20% |
|
For individuals with income exceeding ₹10 Lakh |
30% |
There is an additional 4% health and education cess applicable over these tax slabs for super senior citizens.
Additionally, super-senior citizens with an income exceeding Rs. 50 Lakh per annum will also have to pay a surcharge over their applicable tax rates.
The surcharge is as follows:
As determined in the 2019 Union Budget, senior and super-senior citizens can claim tax exemptions under Section 87A of the Income Tax Act 1961, if they meet the conditions mentioned below –
But before calculating your tax liability, you should also learn about the income tax exemptions for senior citizens that can make life significantly easier for you. Let us take a look!
As per the announcements made through the Union Budget 2018-19, there are three principle provisions for tax exemptions that can be enjoyed by individuals above 60 years of age.
One of the vital areas where you can particularly benefit from these exemptions is healthcare. Owing to the rising cost of healthcare in the country, the government has offered tax benefits on health insurance policies that can reduce the financial liability of seeking treatment by quite an extent.
Following are the tax benefits that can be availed by individuals, as put forward by the Union Budget –
With such income tax exemption limit for senior citizen, seeking healthcare has become much easier for senior and super senior citizens of India.
As compared to those below 60 years of age, senior and super senior citizens enjoy better income tax benefits. Some of them are as follows:
Thus, with such income tax benefits, the government has tried to reduce the tax burden on senior and super senior citizens in the country. So, before you pay your income taxes, make sure you are aware of the applicable tax slabs, exemptions, and the subsequent tax benefits to ensure that you live a financially independent life in your golden years.
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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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