Under the Income Tax Act, 1961, senior citizens are given many types of income tax benefits in the country. To make tax filing easy for them and to provide them comfort in old age on their lifetime earnings, the government gives tax exemption to senior citizens. Here we are telling you about seven such tax benefits which are given to taxpayers above 60 years of age in the category of senior citizens.
1. Tax exemption limit
Senior citizens get higher tax exemptions in both the tax regimes. Income up to Rs 3 lakh is tax free in both the regimes, while for ordinary taxpayers this limit is Rs 2.5 lakh. For super senior citizens the limit is Rs 5 lakh.
2. Exemption from filing ITR
Senior citizens are entitled to a special exemption under the Income Tax Act, 1961 under which taxpayers aged 75 years and above are not required to file income tax returns subject to certain conditions.
3. Benefit on standard deduction
The government gives a standard deduction of Rs 50,000 to taxpayers receiving pension, while those receiving family pension get a pension of Rs 15,000.
4. Exemption on interest income
Senior citizens get higher exemptions on interest income. While a common investor gets tax exemption on interest up to Rs 40,000 annually, senior citizens can avail this benefit on interest up to Rs 50,000.
5. Discount on health insurance
While a regular insurance customer gets a tax deduction of up to Rs 25,000 on the premium paid for health insurance, the government gives a tax exemption of up to Rs 50,000 to senior citizens. This exemption is available under section 80C.
6. On the treatment of serious illness
Under the IT Act, 1961, there is a section 80DDB under which senior citizens are given the option to avail a deduction of up to Rs 1 lakh on the expenses incurred in the treatment of a serious illness.
7. Advance tax payment
Such senior citizens who do not have profit or income from any business or profession and do not have taxable income, are not required to pay advance tax.
8. No tax on reverse mortgage scheme
If a senior citizen mortgages one of his houses under the reverse mortgage scheme for monthly income, then he will retain the rights to the property and will also get tax exemption on the income he gets every month.
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