India’s income tax law provides special benefits to elderly residents and the very old. A person between 60 and 80 years of age is called a “senior citizen” and a person over 80 is a “citizen of very old age”. The income tax benefits available to seniors and seniors range from a higher exemption limit to higher deductions in various sections of income tax for medical expenses and interest earned on medical expenses. deposits. Read on for special income tax benefits for seniors and the very old:
Higher exemption limit
Seniors and the very old enjoy a higher exemption limit compared to taxpayers who are not seniors. The exemption limit is the income level up to which a person is not required to pay any taxes to the government.
For the 2020-21 fiscal year, the exemption limit for a senior is set higher at ₹3,000,000. The exemption limit for an ordinary individual taxpayer is ₹2.50.000. An added benefit of ₹50,000 in the form of a higher exemption limit are available to a resident elderly person.
A very elderly citizen is granted an even higher exemption limit of ₹5,00,000.
Exemption from paying advance taxes
Under section 208, any person whose estimated tax liability for the year is ₹10,000 or more, you are subject to pay an advance tax. However, section 207 grants an advance tax exemption to an elderly resident. According to article 207, a resident senior citizen is not required to pay taxes in advance, as long as he has no business or profession income.
Eligibility to file income tax return manually
A very elderly citizen who presents his income declaration on Form ITR 1 or ITR 4 can present his income declaration in paper mode, that is, for him, the electronic filing of ITR 1 or ITR 4 (as the case may be) it is mandatory. However, you can opt for electronic filing if you wish.
Higher deduction limit on interest income on bank deposits and post office
Interest earned on savings deposits and fixed deposits in banks or post offices or cooperative banks for an amount of up to ₹50,000 earned by the senior is eligible for the deduction under Section 80TTB.
In addition, there will be no deduction of taxes at source until ₹50,000. This limit of ₹50,000 must be calculated for each bank individually.
A non-citizen senior taxpayer is eligible for a tax deduction of up to ₹10,000 under Section 80TTA with respect to interest income on the savings bank account.
Deduction for payment of health insurance premium
Health insurance premium up to ₹50,000 paid in a year by a senior citizen are allowed as a deduction under Section 80D of the Income Tax Act. If the elderly person is paying health insurance premiums for their parents, who are also elderly, they can claim an additional deduction of up to ₹50,000.
Deduction for medical treatment of specific diseases
Under section 80DDB, a senior taxpayer can claim a deduction of up to ₹1,00,000 for expenses incurred by him in the medical treatment of certain diseases.
Standard deduction benefit
From AY 2019-21, a standard deduction up to ₹40,000 has been introduced against the salary income obtained during the year. Consequently, a senior citizen who receives pension income from his former employer can claim a deduction of up to ₹40,000 against said salary income.
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