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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.
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)