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 3 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. Moreover wef 01.04.2018 the limit for TDS on interest on deposits u/s 194A has been increased to Rs 50,000 for senior citizen. Which means if the aount of interest does not exceeds Rs 50,000 no TDS shall be deducted.
As per section 208 every person whose estimated tax liability for the year exceeds Rs. 10,000, shall pay his tax in advance in the form of “advance tax”. Thus, any taxpayer whose estimated tax liability for the year exceeds Rs. 10,000 has to pay his tax in advance by the due dates prescribed in this regard. However, as per section 207, a resident senior citizen (i.e., an individual of the age of 60 years or above) not having any income from business or profession is not liable to pay advance tax.
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 and Rs 80,000 for super senior citizen. Wef A.y 2019-20 the amount of deduction shall be Rs 1,00,000 for both senior and super senior citizen
9) 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)
A deduction upto Rs 10,000/- is allowed under section 80TTA to an assessee in respect of interest income from savings account wef A.y 2019-20. section 80TTB allows a deduction upto Rs 50,000/- in respect of interest income from deposits held by senior citizens. Deduction shall be allowed upto Rs.50,000/- for FDR and Saving Interest u/s 80TTB .However, no deduction under section 80TTA shall be allowed in these cases .
(Republished with amendments)