Tax benefits for Senior citizen. Deductions for senior and super senior citizens

Tax benefits for Senior Citizens

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Tax benefits for Senior Citizens

Tax benefits generally refer to tax law that provides the opportunity to reduce the tax bill when you satisfy certain eligibility requirements. Tax benefits are of different forms which are such as tax deduction, tax exemption, or tax credit. A tax deduction reduces the amount of gross income subject to tax. Tax credit offsets the taxpayers subject to tax and tax exemption is the monetary exclusion that reduces the taxable income, there is also complete relief in tax exemption. In this article we will talk about tax benefits that can be availed by the senior citizens and the super senior citizens.  Senior citizens and the super senior citizens have a different slab rate. In this article we will learn about the slab rates as well as the tax benefits for the senior citizens.

The Income Tax Act gives certain benefits to senior citizens and also tries to ensure that the income tax e-filing is a hassle-free process. Here is a complete list of all the tax benefits that are available to senior citizens.

Who is a Senior citizen and Super senior citizen for income tax purposes who can avail tax benefits ?

There are 2 categories of senior citizens:

Senior citizens: Those above 60 years of age

Super Senior citizens: Those above 80 years of age

The income tax slab rates for senior citizens are different from those of non-senior citizens. Here are the slab rates:

Particulars Non-Senior Citizen Senior citizen Super-senior citizen
Tax-Free Up to 2.5 lakh Up to 3 lakh Up to 5 lakh
5% Tax 2.5 lakh to 5 lakh 3 lakh to 5 lakh NA

What are the tax benefits for Senior citizens and Super senior citizens?

As the slab rates are beneficial for the senior citizens this leads to tax savings of Rs.5000 for the senior citizens and Rs.30,000 for the super senior citizens.

Interest Income exempted up to Rs.50,000

w.e.f from the financial year 2018-2019 new section 80 TTB has been introduced that allows for the deduction of Rs. 50,000. The amount earned is taxable as per the slab rates for senior citizens. It is to be noted that no deductions are made under Section 80 TTA of Rs.10,000 for the interest on the savings account

Tax benefit Deduction under Section 80 D for payment of medical insurance premium

The deductions that are made under Section 80 D for the payment of medical insurance are Rs.25,000 for non-senior citizens. This Deduction is Rs. 50,000 for senior citizens (Which was earlier 30,000 and now it has been increased from 1st April 2018. For Super senior citizens i.e. people above the age of 80 deductions under Section 80 D is allowed not only for payment of the Medical Insurance Premium but also for the actual expense incurred on treatment by  super senior citizens.

Exempted from Payment of Advance tax

The senior citizens who do not have business income are exempted from paying the advance tax and are required to pay the self-assessment tax on the total income.

Tax benefits of Non – deduction of TDS on interest

If the total income of a senior citizen is exempted from the levy of the income tax and the nil tax is payable for the financial year he is required to submit Form 15 H for non-deduction of TDS on Interest on the Fixed Deposit. For senior citizens, this form can be submitted in case the total income after deductions is less than the minimum amount that is exempted from levying the tax. The threshold for tax deduction under Section 194 A for senior citizens has also been raised from Rs.10,000 to Rs.50,000. This amendment was introduced in Budget 2018 and is applicable from FY 2018-2019.

Deduction under Section 80 DDB for an ailment of the specified disease.

Section 80DDB provides the deduction to the assessee for expense on the medical treatment. The allowed deduction under this section was 60,000 for senior citizens and Rs.80,000 for super senior citizens. W.e.f FY 2018- 2019 this has been now increased to Rs. 1,00,000 for both senior citizens and super senior citizens.

No Tax on amount received under Reverse Mortgage Scheme for senior citizens 

A reverse Mortgage is the opposite of a Home loan. But under the reverse mortgage scheme, regular payment is made to the senior citizens till lifetime by mortgaging the house while the ownership remains with the senior citizen and he is also occupying the house. The scheme states that on the death of the borrower the loan is repaid with accumulated interest by the sale of the house property and the balance amount received on sale is given to the legal heirs This amount paid to the senior citizen and super senior citizen is fully exempted from the income tax levy.

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