India’s history hails from a culturally enriched background in which the elders are regarded in the family with respect. In tandem with keeping the cultural and moral values intact, the Indian government offers special income tax benefits for senior citizens. If your senior citizen parents have been planning their investments and taxes, then it is critical to have a comprehensive idea about the different tax benefits that can be availed.
We have mentioned below some of the benefits which may ease out financial responsibilities for senior citizens.
The senior citizens are offered a benefit on account of payment of the health insurance premium up to Rs.50,000/, under section 80 D. However, previously, this limit of deduction for health premium was Rs.30,000. People above 60 or 80 years would need more money for their treatment as well. Therefore, offering them a deduction benefit under Income Tax is a great way to support elderly people.
Any individual who falls under the income bracket to pay tax is allowed certain waivers. The government has set up this basic exemption limit up to Rs.3,00,000 for senior citizens. A senior citizen will have to pay a tax of 5% for the next 3,00,000-5,00,000 slab. Super citizens get a higher advantage, for them, this waiver is of up to Rs.5,00,000 in one financial year.
The senior citizens who happen to be residents of India are not supposed to pay any interest on income earned up to Rs.50,000/- in a financial year. When filing their Income Tax Return, it is mandatory for the senior citizens to fill form 15H. The amount of interest earned over Rs. 50,000 would attract tax according to the slab rate of senior citizens.
Generally, individuals must pay an advance tax if their tax liability is Rs.10,000/- or more in a financial year. However, senior citizens are free from this burden unless they earn income from business or any profession. If not owning a business, they will only have to pay Self-Assessment Tax.
According to section 80DDB of the Indian income tax act 1961, if an individual or HUF has incurred medical expenses for treatment of a specified disease or ailment, such expense is allowed as a deduction, subject to some conditions and limits.
Deduction amount is limited to ₹40000 to those individuals whose age is less than 60 years. Individuals who are having an age of 60 years or more can claim a deduction of up to ₹100000.
Individuals above 80 years are allowed to file for their Income Tax Return through Sahaj (ITR 1) or Sugam (ITR 4). They have an option do it either manually or by electronic means. Senior citizens are also permitted a standard deduction of 50,000 on account of their pension income.
A senior citizen may use a reverse mortgage towards monthly earnings. The ownership of the property remains with the senior citizen. They are provided monthly payments for it and the amount paid in installments to the owner is exempted from Income Tax.
To know more about the Income Tax Benefits for Senior Citizens, you may get in touch with us.
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