OPEN APP
Home / Money / Personal Finance /  7 special income tax benefits for senior citizens
Listen to this article

There are certain tax benefits for senior citizens that they can avail of. Apart from tax benefits the process of income tax e-filing has also been specifically made hassle-free for them. Let's take a look at the income tax benefits available to senior citizens

Different tax-slab rates

The income tax slab rates for senior citizens are different compared to non-senior citizens.

 

Different tax-slab rates for senior citizens
View Full Image
Different tax-slab rates for senior citizens

Interest income exemption up to 50,000

CA Amit Gupta, MD, SAG Infotech said that from FY 2018-19, Section 80TTB came into action that allows a deduction for the interest of 50,000. The amount earned over 50,000 will be taxed according to the Slab Rates specially designed for Senior Citizens. However, it is important to note that in such cases deduction will not accrue under section 80TTA of 10,000 for interest on the savings account.

Deduction under section 80D for medical insurance premium payments

Section 80D allows non-senior citizens a deduction of 25,000 on medical insurance premium payments, however for senior citizens, it gets increased to 50,000. “The limit was 30,000 earlier but in Budget 2018 it gets increased to 50,000. Further, section 80D allows deduction not only for the medical insurance premium payment but also for the actual expenditure incurred on treatment by very senior citizens," said Gaurav Kapoor, director and co-founder, Fincorpit Consulting.

Non-deduction of TDS on interest

If the total income of a senior citizen is exempted from income tax and nil tax is payable by him/her for that financial year, he can submit Form 15H for non-deduction of TDS on interest on fixed deposits.

Additionally, with amendments made via budget 2018, the limit for tax deduction under section 194A for senior citizens has also been increased from 10,000 to 50,000, said Amit Gupta.

Higher deduction under section 80DDB for specified illness

Section 80DDB provides tax deduction relief to taxpayers in case of expenditure on medical treatment of specified diseases. The allowed deductions earlier were 60,000 for senior citizens, but Budget 2018 increased it to 1,00,000.

No payment of the advance tax is required

Senior citizens without any business income are exempted from advance tax payment and they only have to pay self-assessment tax on their total income.

No tax on the amount received under the reverse mortgage scheme

With the reverse mortgage scheme, senior citizens get regular payments by mortgaging their home for life while the ownership and possession remain with the senior citizen. With this scheme, on the death of the borrower, the loan gets repaid with earned interest through the sale of the property and the balance amount obtained on the sale gets passed on to the legal heirs. Under this scheme, the amount paid in instalments to senior citizens is completely exempt from income tax.

 

Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.
Close
Recommended For You
×
Edit Profile
Get alerts on WhatsApp
Set Preferences My ReadsFeedbackRedeem a Gift CardLogout