• Mar
  • 08
  • 2014

Tax Benefits Available to Senior Citizens

CA Sandeep Kanoi

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 exemption limit for Senior Citizens has been enhanced from Rs. 2,40,000 to Rs. 2,50,000.  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.

4. 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.

5. 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.

6. 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.

7.  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.

8.  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.

9. Senior Citizens not having Business Income Exempt From Advance tax payment – 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.

Republished with amendments


24 Responses to “Tax Benefits Available to Senior Citizens”

  1. upendra nath Bose says:

    my DOB 19-09-1935. From which AY I will be eligible to claim benefit For Sr. citizen 80 yeas or more
    upendra nath Bose

  2. Samir Kumar Das says:

    I was a Central Govt. employee and retired on 31/03/2014. My date of birth is 16/03/1954. Will I be considered as “Senior Citizen” for the AY 14-15 and eligible for tax rebate for 2,50,000.

  3. Jit says:

    After filing 15H for FD in Bank is it necessary to file IT return in ITR 1 , am a senior citizen with pension benefit

  4. FARAH KHAN says:

    My father is a senior citizen and receives pension for which due tax is paid. He has availed the benefit under 80C from STDR in a bank. After 6 years he will receive a Rs. 20000 as interest. Is the interest taxable and if yes. is there any method to split the interest on yearly basis for income tax payment.

  5. S.Venkateshwarulu says:

    Dear Sir / Madam,

    If a Central Government official was given a service extension of 2 years that is from the age of 60 to 62 years, will he be treated as regular salaried person for income tax purpose or will he be treated as a senior citizen for the income tax calculations?

    Please clarify

    S.Venkateshwarulu

  6. SampathKumar says:

    Iam 79 years old ,retired My individual annual income excluding gifts from son/daughter is less than Rs 2,50,000/ If such gifts are included the total may exceed the limit.Am I required to file IT Return
    .

  7. venkat says:

    QUOTE
    can claim exemption on the tax deducted at source (TDS)
    UNQUOTE
    Is it not necessary for this concession to have NO taxable income. please clarify.
    even if you have taxable income can sc give 15 H form.

    It would be better if TDS is not deducted on income from deposits for senior citizens.

  8. venkat says:

    QUOTE
    can claim exemption on the tax deducted at source (TDS)
    UNQUOTE
    I

  9. kanaiyalal sohagia says:

    Dear Sir,

    I have sinor citizen and i have done medical treatment for brain during last year so in which coloum i examption for this medical treatment.

    Thanking you
    kanaiyalal sohagia

  10. lalitha hariharan says:

    VERY SENIOR CITIZEN CLARIFICATION SOUGHT. A PERSON BORN IN JUNE 1933 – iS SHE/HE A VERY SENIOR CITIZEN OR NOT SINCE 79 YEARS COMPLETED AS OF jUNE 2012 ITSELF. pLEASE ADVISE

  11. J. Singh says:

    I am a salary paid sr citizen (13.6.1952) with no income from business or profession. I retired on 30.6.12. I received 4 month salary and 8 month pension during 2012-13 F.R.
    My employer deducted tax at source and deposited the same in time.
    I have a fixed deposit and the bank deducted tax at source @10% and deposited the same in time.
    I am to pay 9200/- as additional tax (self assessed tax) on account of the fixed deposit.
    I have not paid any advance tax on 15th Sept 12, 15th Dec 12
    and 15th March 2013.
    Pl let as how much interest I am required to pay on myself assesses tax amount of 9200/- if
    1. I deposit it by 31 May 2013
    2. I deposit it by 30 June 2013

  12. DEBABRATA DEY says:

    I am a retired senior citizen (DOB – 05.01.1951). I have retired from WBPDCL on 31.01.2011. I have no income chargeable under the head “Profits and gains of business or profession”. However, in the FY 2012-13, I have income (interest/pension etc.) from other sources like, FD investments in bank (40 Lacs), MIS in Post Office (9 Lacs), one time investment in LICI (10 Lacs). I am also getting EPF/LICI Pensions. My income from other sources (bank/post office interest, LICI/EPS Pension) is Rs. 6, 49,090.00 in the FY 2012-13. I have paid yearly Mediclaim Premium Rs. 6,722.00 & yearly LICI Premiums Rs. 3, 637.00. What amount of Self Assessment Tax I have to pay to the IT Department (on line) prior to filing IT Return in July, 2013?

    The IT Expert may kindly calculate and mail me the details of calculation in this regard to my e-mail Id .

  13. DEBABRATA DEY says:

    I am a retired senior citizen (DOB – 05.01.1951). I have retired from WBPDCL on 31.01.2011. I have income (interest/pension) from other sources like FD investment in bank (40 lacs), MIS in Post Office (9 lacs), one time investment in LICI (1o lacs). I am also getting monthly EPF Pension. I have no income chargeable under the head “Profits and gains of business or profession”. My yearly income from other sources(bank/post office interest, LICI/EPS Pension) is Rs. 6, 49,090.00. I have paid mediclaim premium Rs. 6,722.00 & LICI premiums Rs. 3, 637.00. What amount of self assessment tax I have to pay prior to filing IT Return in July, 2013? Please mail me the details of calculation in this regard.

  14. Ramprasad says:

    i am a senior citizen and pl. let me know whether i am eligible for standard deduction. if so, what is the amount for the financial year 2012-2013.

  15. A Subramanyam says:

    I am attaining the status of senior citizen during the middle of this financial year ie 2013-14. Kindly let me know whether I can derive the benefit for the full year.

  16. GURDEV SINGH says:

    Dear Sir,

    Amount of Rs.1350/- TDS Payment of interest on Senior Citizen Saving Scheme was deducted by the Post Master Sector-20, Chandigarh Book adjustment through audit office Kapurthala for the year 2010-2011 vide their certifi9cate of DTS issued on 25 Aug 2011.The request of refund for Rs. 1350/- submitted to ITO Ward-5(3) Chandigarh on 30 Aug 2011/2011-12. The particular are as given ASK No: 702300811049740 ,Gurdev Singh, ,# 2145/3, Sector-45 C,Chandigarh PAN No : ACXPS2034D/ITR-I RRR/BIN : W)450311496/R00048,ITO WARD-5,(3) Chandigarh, My SBI Sector-30, Chandigarh Saving A/C No;10304711370. The refunmd of Rs. 1350- has not been refunded so far. Please look into the matter and reply as early as possible on my email ID: pbgurdevsingh2145@gmail.com Thanks.

  17. S. SIVARAMAKRISHNAN says:

    The honourable Finance Minister, Shri P. Chidambaram, does good to employees in service and to those retired from service whenever he plays the role of finance portfolio. Now he has done away the system of payment of advance tax for senior citizens from financial year 2012-2013, thereby avoiding the levy of penal interest. Now the senior citizens have to pay only self assessment tax. This is a great help the F.M. has done to the senior citizens. Shall I request the F.M. to consider another amendment to the payment of gratuity act 2010 making it applicable to all those retirees with effect from 1st January 2006, as the amendment was made applicable from May 2010 only for those retired from other than government service. If he does this help, a number of non-government pensioners retired from 1st January 2006 to 30th April 2010 will be greatly benefited.

  18. Lalit Bhatnagar says:

    My understanding is that exemption limit of Rs. 240,000, now increased to Rs. 250,000, is not available to NRIs, specially those having acquired citizenship of another country. They can claim only Rs. 160,000, the lowest for a male income tax payer. Would be higher for women.

    Please clarify.

  19. U R K Rao says:

    I am a US citizen living in US with pension income of about 5 lacs a year in India. I do not have any other income in India. I am 77 years old. What is my deduction as a senior citizen during FYI 2013-14.
    Thanks for your kind help.

    U R K RAO
    Louisville,CO 80027
    USA
    FEB2,2013

  20. n.krishnamoorthy says:

    From FY 2012-13 onwards senior citizens are not required to pay advance tax. This is a significant facility because the Deptt cannot levy interest u/s.234B & 234C for failure to pay advance tax.

  21. K.P.SAGAR says:

    sir
    may i request you to kindly summarisethe benefits which can be availed by the senior citizen in a shape of synopsis, so that it can be published and give a wide publicity and the needy can use the same. pl. oblige me by doing so. thanks

  22. J.S.Sud says:

    One less headache for senior citizens is that they do not have to pay advance tax.They can pay it by self assessment prior to filing their return.

  23. LR Gupta says:

    No you can not as the limit reduced from F.Y. 11-12

  24. [P.D.SHARMA.LL.B. says:

    DEAR SIR
    WE CAN TAKE BENIFIT OF INCOME TEX AS 60 YEARS AGE IN THE YEAR 20110-2011 LAST YEAR UR NOT
    THANKING YOU 
    P.D.SHARMA

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