Government has special provisions to accommodate tax benefits for Senior citizens who have attended 60 years of age during the financial year.
Please remember, after attending 60 years of age during the financial year, you will be eligible for following tax benefits. Otherwise, normal provisions will be applicable.
From financial year 2011-12, qualifying age limit for a senior citizen has been reduced from 65 to 60 years. This means, if during the financial year you have attended 60 years of age, then from that year you will be treated as a senior citizen.
Here are the 5 special tax benefits for senior citizen in India.
Higher basic exemption limit
Basic exemption amount is a limit up to which Indians are not liable to pay income tax.
The normal basic exemption limit applicable for financial year 2018-19 and 2019-20 is Rs. 2,50,000.
For senior citizens, government of India has divided basic exemption limit to two categories.
In the first category, a senior citizen who is 60 years and below 80 years of age, will be eligible for basic exemption limit of Rs. 3,00,000.
In the second category, a person who is 80 years of age or above are eligible for basic exemption of Rs 5,00,000. This category of person is known as super senior citizen.
Reverse mortgage scheme
Reverse mortgage scheme is the best benefit available to senior citizens who are house owners and wants to keep their house in bank as mortgage to get monthly income. Such monthly income will not be chargeable tax.
Higher tax benefits on medical insurance
As a senior citizen, you will be eligible for a higher income tax deduction of Rs. 30,000 per year towards amount paid for medical insurance instead of normal deduction of Rs.25000 per year.
To get eligible, the person in whose name the premium has been paid must be a senior citizen. It does not matter who paid it.
Higher deduction limit for senior citizen
Similar to section 80D, under section 80DDB, a senior citizen will also be eligible for higher income tax deduction of Rs.60000 instead of the normal deduction of Rs. 40000 for the expenses borne on treating certain specified diseases like cancer, AIDS etc. A super senior citizen can claim deduction of up to Rs. 80, 000.
Exemption in payment of advance tax
A senior citizen not having any income under the head “profits and gains from business or profession” is not liable to pay advance tax. In case he is liable to income tax, then that can be paid in self assessment at the end of the financial year.
In addition to all these 5 special benefits, a senior citizen can also avail no TDS benefit on interest income earned on fixed deposits by submitting form 15H as prescribed under section 197 of IT act. After submitting form 15H bank will not deduct TDS from your interest income.