Income Tax Benefits for Senior Citizens, Income Tax Slab Rates for Senior Citizen and Super senior citizen

Introduction

The Indian Income Tax Act provides various tax benefits to senior citizens and makes income tax e-filing as simple as possible. Individuals who are 60 years old or older but less than 80 years old are referred to as senior citizens for tax purposes. Individuals who are 80 years old or older are considered as a Super Senior Citizen. This article focuses on Income Tax Benefits for Senior Citizens. Old age is a time when people over the age of 60 or 80 will require a large sum of money for their treatment. Giving them an income tax deduction is a fantastic way to show your support and assistance. Let’s have a look at Income Tax Slab rates for Senior Citizen and Super senior citizens before moving further with the Income Tax Benefits.

Income Tax Slab Rate for Senior Citizens (60 years or more but less than 80 Years)

Income Tax Slab Rate for Super Senior Citizens (80 Years or more than 80 Years)

Income Tax Benefits for Senior Citizens

Below are some of the tax breaks and incentives that may help senior citizens with their financial obligations.

• Relief from Advance Tax

Ordinary people must pay an advance tax if their tax liability is INR 10,000 or more in a financial year, while older folks are exempt unless they earn money through a business or profession. Those who do not own a business must simply pay Self-Assessment Tax. Advance Tax Payment is a payment made in advance to the Indian government that is required of all citizens. Putting senior citizens in the same category is not exactly equitable.

• Benefits under Section 80D

Senior citizens are eligible for a benefit under section 80D if they pay a health insurance premium of up to INR 50,000. For senior citizens, the deduction maximum for health premium payment was previously INR 30,000. The deduction for the payment of medical premiums as well as the actual expenses incurred on their treatment is authorized for super citizens under section 80D.

• Benefits under Reverse Mortgage Scheme

Any of a senior citizen’s residences can be reverse mortgaged to provide monthly income. The senior individual retains ownership of the property and receives monthly payments for it. The money paid to the owner in instalments is not subject to income tax.

• Advantages on Interest Income

Senior citizens who live in India would be exempt from paying tax on interest collected up to INR 50,000 every financial year. This is applicable under section 80 TTA of the Income Tax Act, and it will take into account interest generated in a bank deposits, savings bank account, and/or post-office deposits.

Senior citizens must complete Form 15H when filing their income tax returns. The amount of interest earned exceeding INR 50,000 would be taxed at the senior citizen’s slab rate.

• ITR (Income Tax Return) Benefits

Individuals above the age of 80 can file their income tax returns using either Sahaj (ITR 1) or Sugam (ITR 4). They have the option of doing it manually or electronically. This will help them in saving maximum tax.

• Benefits of basic exemption

Every individual in India who falls into the tax category is entitled to several basic tax exemptions. While the government has set a basic exemption ceiling of INR 3 lakhs for older folks. A senior citizen will have to pay a 5% tax on the following 3 lakhs-5 lakhs slab.

In terms of income and age, super citizens have a greater advantage. This waiver is worth up to INR 5,00,000 in a single financial year for them. Except for elderly or super citizens, ordinary citizens are only eligible for a tax exemption of up to INR 2,50,000, causing them to pay higher taxes.

FAQs on Income Tax for Senior Citizens

1. Is it required for senior citizens to file taxes if their taxable income is below the exemption limit?

Yes, if a senior citizen earns money during a fiscal year, tax filing is necessary, and if TDS was deducted on any of the senior citizen’s earnings, the tax payer can get a refund of the TDS (Tax Deducted at Source) through tax filing.

2. Is the 80c rule relevant to seniors?

Yes. The deduction under section 80C is accessible to senior citizens under the current tax slabs, but it will not be available under the new tax regime, which is left to the discretion of the taxpayer.

3. What is the standard deduction for people over the age of 65?

The standard deduction for older citizens is now $50,000, thanks to recent amendments in the Income Tax Act.

4. What is the maximum amount a senior citizen and Super Senior Citizen can earn tax-free?

A senior citizens can earn up to three lakh in tax-free income, while super senior citizens above the age of 80 can earn up to five lakh in tax-free income.