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Tax benefits for Senior Citizen and Super Senior Citizen

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Yesha Dalwadi

Income Tax
Tax Benefits
Tax Benefits for Senior Citizens

Individuals are always looking out for investment options that will provide them with a steady source of income during their retirement age. The government has come up with many incentives over the years to provide tax benefits to senior citizens. Senior and super senior citizens usually have income from pension, fixed deposits, interest on savings, rental income etc. This article will help you understand the various aspects related to relief in taxation that a senior and super-senior citizen can avail.

Tax Benefits available to Senior and Super Senior citizens

Individuals between the age group of 60 and 80 are considered senior citizens and citizens who are above the age of 80 are termed as super senior citizens. Following are various benefits available to them:

Exemption on Interest Income

By following the old tax regime, these particular group of taxpayers having an interest income up to INR 50,000 from the following deposits can claim a deduction u/s 80TTB on such income:

If this interest income is more than INR 50,000 then TDS is deducted. However, citizens above the age of 60 can submit Form 15H to claim relief from TDS deduction on income generated from such deposits.  

Exemption on Health Coverage and Medical Expenditure

An exemption u/s 80D is available up to INR 50,000 on the health insurance premium amount in order to increase the scope of receiving good health coverage. Additionally, u/s 80DDB deduction of INR 1,00,000 is also available on the expenses incurred on the treatment of a specific disease. These two deductions are available only under the old tax regime.  

No Advance Tax

An individual has to pay advance tax when the tax liability is more than INR 10,000. However, senior and super senior citizens do not have to pay advance tax if they are not earning income from business or profession. They only have to pay Self-Assessment Tax after calculating the final tax liability of the financial year.

Offline ITR filing

It is compulsory for resident individuals to file their return online. However, for super senior citizens filing the return online is not mandatory. They can file either file their ITR 1 (Sahaj) and ITR 4 (Sugam) online or offline.

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Exemption on Reverse Mortgage

A senior citizen can also avail tax benefits under the reverse mortgage scheme. Under this scheme, the property of the individual is mortgaged and in-return the citizen is paid EMI which can help them to make monthly earnings. The amount the senior citizen receives is exempt from taxation and the ownership of the property also remains with the senior citizen till he resides in it.

Income Tax Slab Rates for Senior Citizens

Income Tax Slab Tax Rate Health and Education Cess
Income up to INR 3 lakh Nil Nil 
Income between INR 3 lakh and INR 5 lakh 5% 4% of Income Tax
Income between INR 5 lakh and INR 10 lakh 20% 4% of Income Tax
Income that exceeds INR 10 lakh* 30% 4% of Income Tax

Income Tax Slab Rates for Super Senior Citizens

Income Tax Slab Tax Rate Health and Education Cess
Income up to INR 5 lakh Nil NilĀ 
Income between INR 5 lakh and INR 10 lakh 20% 4% of Income Tax
Income that exceeds INR 10 lakh* 30% 4% of Income Tax

FAQs

I am a senior citizen, can I file my ITR offline?

Yes, Senior and super senior citizens are allowed to file their income tax offline.

Got Questions? Ask Away!

  1. Hey @sushil_verma

    There are a wide range of deductions that you can claim. Apart from Section 80C tax deductions, you could claim deductions up to INR 25,000 (INR 50,000 for Senior Citizens) buying Mediclaim u/s 80D. You can claim a deduction of INR 50,000 on home loan interest under Section 80EE.

  2. Hey @Dia_malhotra , there are many deductions that you can avail of. Your salary package may include different allowances like House Rent Allowance (HRA), conveyance, transport allowance, medical reimbursement, etc. Additionally, some of these allowances are exempt up to a certain limit under section 10 of the Income Tax Act.

    For eg,

    • Medical allowance is exempt up to INR 15,000 on a reimbursement basis.
    • Children education allowance is exempt up to Rs. 200 per child per month up to a maximum of two children.
    • Conveyance allowance is exempt up to a maximum of Rs. 1600 per month.

    Tax on employment and entertainment allowance will also be allowed as a deduction from the salary income. Employment tax is deducted from your salary by your employer and then it is deposited to the state government.

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