• Oct
  • 30
  • 2013

Tax benefits for senior citizens

As per Income Tax Act one who has Completed the Age of 60 years during the previous year or in a year Prior to that is a senior Citizen and one who has Completed the Age of 80 years during the previous year or in a year Prior to that is a super Senior Citizen.

1) The Income Tax Act identifies a senior citizen as a person who is 60 years of age or more at any time during the previous year. It provides for special benefits for such persons.

2) As per the IT Act, senior citizens who have an income up to Rs 2.5 lakh per annum are eligible for tax exemption.

3) 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.

4) 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.

5) Under Section 80D, the limit on the premium paid for medical insurance goes up to Rs 20,000 if the person covered under the policy is a senior citizen.

6) Senior Citizens not having Business Income Exempt From Advance tax payment

7) Senior citizen above the age of 80 years are entitled to higher exemption Limit of Rs. 5,00,000 from A.Y. 2012-13.

8) No Income Tax Scrutiny of Senior Citizens and Small Tax payers Having Gross Income less then 10 Lakh

9. Higher Deduction u/s 80DDB

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.

10. 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)

(Article was First Published on 21.04.2012 and Republished with amendments)

Sandeep Kanoi

15 Responses to “Tax benefits for senior citizens”

  1. Bharat says:

    Sr.Citizen should not have income tax up to Rs. 5 lacs.

  2. GVA Srinivas says:

    One of our customer, a senior citizen, has submitted Form 15 H and demanding us not to make any TDS on his deposits. The interest income per annum is exceeding Rs.3.00 lacs and as per the extant instructions in our Bank, we have to make TDS whenever the interest income of a senior citizen exceeds Rs.2.50 lacs. Please clarify/guide us in this regard. Please provide the circular / notification on this issue, if the customer is right.

  3. Sadru says:

    Please notify me tax benefit news for senior citizen.

  4. V. G MANEK says:

    Medical expenses incurred by kins of a senior citizen whether it is permissible for Deduction u/s 80DDB. Pls comment

  5. RAJ KUMAR JAIN says:

    THE LIMIT FOR TA EXEMPTION SHOULD BE RAISED 2.5 LACS TO ATLEAST 5 LACS AND INTEREST EARNED ON BANK FIXED DEPOSITS MADE OUT OF RETIREMENT BENEFITS BE EXEMPTED FROM INCOME TAX.

  6. M V kelkar says:

    Inform the details of IT Notification, amendment where by the Senior Citizena are exempted from payment of advance Tax

  7. K. Dorai says:

    Please clarify me on the following :

    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.:

    Does it mean that 0.50% interest on investments in term deposits with banks is exempt from income-tax. If so, from which year.

    2) Senior citizens can claim exemption on the tax deducted at source (TDS) n interest income earned on deposits. It can be done by submitting Form 15H under Section 197 of the IT Act. :

    What is the ceiling on interest income on term deposits to file Form 15H

  8. RAJ KUMAR JAIN says:

    THERE IS NO TAX SAVING DEPOSITS WHERE THE INTEREST EARNED IS EXEMP[T FROM INCOME TAX. IT SHOULD BE.
    IF THERE IS ANY, PLEASE ENLIGHTEN ME.

  9. M L Jha says:

    Sir ji,
    Almost only subordinate services uptograde II Sr Citizens comes in the exemption upto the limit of 2.5 lac.I think these after III ACP cross the limit 2.5 lac.In addition to No.of Sr Citizen comes/include in the line of 60 to 80 years. A few Sr Citizens above 80 years might be got benefited of limit 5 to 10 lac. Its simply a fun with the name of exemption to Sr.Cicizens. Why it should not to have been exempted reversed as 5 to 10 lacs for sr citizens agegroup of 60 to 80 year and above. Sr Citiazen should attract the attention of Govt. Thanks Jha M L

  10. ANIL TIWARI says:

    Senior citizens above 60 years and drawing income by way of pension upto Rs.10 lac p.a.should be exempted from filing the Income tax return The deductor is liable for the deduction and deposit of the income tax on the amount of income from Pension. So that Income tax department have less burden to scrutinize and process the returns related to senior citizens. The tax slab for senior citizens should be increased to Rs.5.00 lac from present 2.50 and the rate of taxation for senior should be 10% from 5 – 10 lac and 20% from 10 and above. For entire life they paid Taxes to the Government, now the Government should also think of pensioners, so they can live the life happlily .
    You are requested to submit these suggestions TO THE ministry of finance for the forthcoming Budget of 2014 . Thanking you Sir

  11. R K Jain says:

    The age should be reduced to 70 years from 80 years for Super Senior Citizen so that they can enjoy life at the fag end of their life. The whole life they had been paying tax, now if they save little bit tax and donate or help some body or distribute to their grand childern let them do it and feel some satisfaction.

  12. KR says:

    DEAR TAX GURU, could you please clarify about the EXACT AGE of senior citizen?(Sl.No:1) whether 59 years completed and 60 years running during the previous year (or) (Sl.No:2) 60 years completed and 61 years running during the previous year is eligible as Senior citizen? As per your First Line of this article, you have mentioned “completed the age of 60 years” stands for Sl.No:2 above. If Sl.No:1 is correct, then i request you to change and START the First line of this article as “As per Income Tax Act one who has ATTAINED the Age of 60 years OR MORE DURING PREVIOUS YEARS” Thank you sir.

  13. Chandrahash Chaudhary says:

    Informative article on “Tax benefits for Senior citizens”

  14. venkat says:

    what about very senior citizens above 80 years old.

  15. Rajni Desai says:

    Senior citizen limit is already 2.5 since last year and age limit is also reduce to 60.
    Pls comment.

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