A
person becomes senior citizen under Income Tax Act in any year after attaining
the age of 60 even for one day. Once he attains 60 years, his status as senior
citizen in that financial year, gives him some relief .There are not many
income tax exemptions available for senior citizens. These are listed below:
1.
Higher Exemption Limit
From
F.Y. 2011-12 Qualifying age for Senior Citizens has been reduced from 65
years to 60 years and from A.Y. 2015-16 exemption limit for Senior Citizens has
been enhanced from Rs. 2,50,000 to Rs. 3,00,000. A new category of Very
Senior Citizens, 80 years and above, has been created who will be eligible for
a higher exemption limit of Rs. 5,00,000. Senior citizen above the age of 80 years are entitled to
higher exemption Limit of Rs. 5,00,000 from A.Y. 2012-13.
2.
Reverse mortgage for senior citizens
Reverse
mortgage’ – a concept introduced by Finance 2007 -provides that a senior
citizen will be able to avail of monthly income streams by mortgaging a house
owned by him. For more details read the following article :- Reverse mortgage created under a scheme made and notified by
the Central Government shall not be regarded as a transfer U/s. 2(47)
3.
Tax benefits on medical insurance hiked
A
senior citizen can avail of higher of higher deduction of Rs 20,000 u/s Section
80D and the same limit is been further increased to Rs. 30,000/- from A.Y.
2016-17.
4. Tax benefit in respect of Expense on medical
expenditure in respect of a very senior citizen
With effect from A.Y. 2016-17 Any
payment made on account of medical expenditure in respect of a very senior
citizen, if no payment has been made to keep in force an insurance on the health
of such person, as does not exceed thirty thousand rupees shall be allowed as
deduction under section 80D. Section 80D- Hike in Deduction Limit for Mediclaim
5. Higher Deduction u/s 80DDB for
Senior Citizens and Super Senior Citizens
Section
80DDB provides deduction to an assessee in case of expense on medical treatment
of specified ailments. Generally this deduction is available upto Rs 40,000 .
However , if the patient is a senior citizen, then deduction of Rs 60,000 is
allowable.
From A.Y. 2016-17 higher limit of
deduction of upto eighty thousand rupees is allowable, for the
expenditure incurred in respect of the medical treatment of a “very senior
citizen”. A “very senior citizen” is proposed to be defined as an
individual resident in India who is of the age of eighty years or more at any
time during the relevant previous year. Section 80DDB– Limit raised & waived condition of certificate
6.
No Routine Income Tax Scrutiny of Senior Citizens -Appreciating the concern of these taxpayers and with a
view to mitigate their hardships, Central Board of Direct Taxes has reviewed
its scrutiny selection procedure. In order to redress the grievance, it has
been decided that during the financial year 2011-12, cases of senior citizens
and small taxpayers, filing income-tax returns in ITR-1 and ITR-2 will be
subjected to scrutiny only where the Income Tax department is in possession of
credible information. Senior citizens for this purpose would be individual
taxpayers who are 60 years of age or more.
7.
Senior Citizens not having Business Income Exempt From
Advance tax payment :- From Financial year 2012-13
resident senior citizen, not having any income chargeable under the head
“Profits and gains of business or profession”, shall not be liable to pay
advance tax and such senior citizen shall be allowed to discharge his tax
liability (other than TDS) by payment of self assessment tax.
8. Senior citizens receive a higher interest (up to 50
bps) on a 5-year fixed deposit, which is eligible for deduction from the total
income under Section 80C.
9. Senior citizens can claim exemption on the tax deducted at source
(TDS) on interest income earned on deposits. It can be done by submitting Form
15H under Section 197 of the IT Act.
- See more at:
http://taxguru.in/income-tax/what-are-the-tax-benefits-available-to-senior-citizens.html#sthash.auOIt4td.dpuf
