About 49 percent of the elderly in India did not fully utilize the 80C limit, and only about 7 percent consumed the 80D ceiling allotted to them. Income Tax Act of 1961 for this year’s Income Tax Return (ITR), revealed a study by Clear (formerly ClearTax), an ITR e-filing service company.

Here we examine how the law defines the elderly and the benefits it offers them.

Who is a senior citizen under Income Tax Act?

According to the law, an elderly person is someone who has completed 60 years of age but is under 80 years of age, while a senior citizen is someone who is over 80 years of age.

The following table shows the status of senior citizens or senior citizens according to their date of birth.

A table showing the status of senior citizens or senior citizens according to their date of birth
A table showing the status of senior citizens or senior citizens according to their date of birth Source: Taxmann

Tax Deductions and Other Benefits for Seniors:

Deductions under section 80DDB

Naveen Wadhwa, Deputy General Manager (DGM) at Taxmann, a Delhi-based publishing company, said that Income tax The Act provides a deduction limit for certain medical treatment for self, dependent relatives, or dependent elderly.

Under section 80DDB, deduction is allowed for such medical expenses.

Maximum deduction amount for self and dependents is Rs 40,000; for senior dependents the total is Rs 1,00,000.

Deductions under section 80D

Divya Baweja, partner at Deloitte India, said senior citizens can avail 80D benefit of the Income Tax Act for medical expenses and health insurance. – health.

The deduction limit for individuals other than senior citizens is Rs 25,000, including Rs 5,000 for medical check-ups. For senior citizens it is Rs 50,000 for health insurance.

Also, if the person is a senior citizen and his parents are senior citizens or senior citizens, Rs 50,000 for himself and Rs 50,000 for parents can be claimed as premiums.

But if the person does not have health insurance but claims medical expenses, section 80D offers a deduction of up to Rs 50,000.

According to Ajay Chandiramani, finance expert and senior guide at GetSetUp, a platform where adults learn and share new skills, this special deduction (Rs 50,000 ) provided for a senior’s medical expenses is for them personally, meaning “this benefit.” can only be done by senior citizens. Also, the total deduction under section 80D does not exceed Rs 1,00,000.

Deductions under section 80DDB

Section 80DDB offers a deduction on medical expenses for a specified disease, subject to certain conditions. Payment must be made for the treatment of self, dependent spouse, children, parents and brothers and sisters.

Baweja pointed out that the deduction is limited to a maximum of Rs 1,00,000 for senior citizens and a maximum of Rs 40,000 for non-senior citizens.

Deductions under section 80 TTB

Section 80 TTB allows deduction of income earned from banks, post offices and cooperative banks by senior citizens. It offers a deduction of up to Rs 50,000 during the financial year for savings and time deposits such as recurring and fixed deposits.

Baweja added that non-senior citizens can get a deduction under TTB 80 “for interest on savings accounts” up to Rs 10,000 in a financial year.

Senior citizens can avail 80D benefit of Income Tax Act for medical expenses and health insurance
Senior citizens can avail 80D benefit of Income Tax Act for medical expenses and health insurance.

Other tax benefits for seniors

No advance tax payment is required if there is no business or professional income.

Every citizen whose annual income tax is Rs 10,000 or more should pay advance tax. But seniors do not have to pay advance tax unless they have income under the Profits and Gains from Business or Occupation (PGBP).

Higher limit of TDS on interest payments from Bank/Post Office

Section 194A of the Income Tax Act provides a higher limit for deduction of TDS on interest paid by banks or post offices, including cooperative banks. For senior citizens the limit is Rs 50,000, and for others it is Rs 40,000. Interest payments beyond this limit are subject to TDS deduction.

E-filing of ITR in paper mode for super senior citizens

Senior citizens (80 years or above) can file their ITR through paper mode, apart from online facility. They can submit ITR 1 (Sahaj) and ITR 4 (Sugam) in paper mode.

ITR Exemption for Prescribed Senior Citizens

According to Section 194P of the Act, a senior citizen who is 75 years of age or above in the previous year, will get exemption while filing the ITR, subject to certain conditions, including submission of a special letter and just having a pension and a pension. Interest income, received from the same bank.

“Pension income and income should be deposited in the same bank, and such senior citizens provide a declaration to the bank in form No. 12BBA. If all the above conditions are satisfied, the bank is liable to deduct tax under section 194P as per applicable slab rate,” said Wadhwa.

Higher tax exemption terms

For individual taxpayers it is Rs 2,50,000. However, senior citizens get exemption of Rs 3,00,000, and in case of senior citizens it is Rs 5,00,000.

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Categories: Income Tax