The start of a new fiscal brings with it a number of changes in the Indian income tax laws. The government has provided certain tax benefits to senior citizens this fiscal. Some of these are mentioned below:
Basic Exemption Limits
For ordinary individual tax payers the basic exemption limit, upto which he is not required to pay any tax, is presently capped at Rs 2.50 lakhs. However, for resident senior individual citizens, who have completed the age of 60 years and yet to complete 80 years, the limit is Rs 3 lakhs. A resident individual tax payer over 80 years does not have to pay any tax upto Rs 5 lakhs annual income.
Deduction under Section 80D
For all senior citizens deduction upto Rs 50,000 for health insurance premium can be claimed by them or their children. From the current year, in case the senior citizen does not have any medical insurance, deduction upto Rs 50,000 can be claimed for any medical expenses including day-to-day expenses and hospitalisation. Earlier, this benefit was available only for the senior citizens who had completed 80 years.
Deductions under Section 80 TTB
Till last year, a deduction up to Rs 10,000 was available with respect to interest from savings bank account, but from the current year all senior citizens can claim deduction not only for savings bank interest but also for interest on any deposit with post office or bank and that too up to Rs 50,000 in a financial year. Seniors will now also be able to claim enhanced deduction on the deposits made under Senior Citizen Savings Scheme (SCSS). The law has also been changed to provide that the no tax deduction at source happens for senior citizen as long as interest on all these deposits for all the branches of a bank taken together does not exceed Rs 50,000 in a year. While arriving at the amount of Rs 50,000 interest on saving bank account shall be excluded as there is no provision for tax deducting at source on it irrespective of amount credited during the year. So a senior citizen has to submit form No 15H only if he wants to receive the interest without deduction of tax at source and such interest exceeds Rs 50,000 a year.
Deduction under Section 80 DDB
Tax laws allow senior tax payers a deduction of expenses incurred for medical treatment of self or dependent relatives. For general tax payers the amount of deduction available is Rs 40,000 but in case the expenses are incurred by a senior citizen the entitlement goes to Rs 1 lakh in a year.
Exemption from Payment of advance tax
In case your tax liability after reducing the amount of TDS is more than Rs 10,000 a year, you are required to pay advance tax in four instalments. However, senior citizens are exempted from requirement of payment of advance tax provided they do not have any income under the head “Profits and Gains of Business or Profession”. The senior citizen can discharge their tax liability at the time of filing their ITR.
The author is a CA, CS and CFPCM