New Delhi: Irrespective of the age, all worry about future and make choices to save and invest money to have a secure tomorrow. Also Read - Income Tax Return Filing Deadline For FY'19 Extended by Two Months | Read Here
Every working individual who has annual income over the tax-free limit or has received any income on which tax was deducted at source (TDS) needs to file their Income Tax Return (ITR) every year. However, people considered as senior citizens between 60 and 80 years of age and Very Senior Citizens above the age of 80 years enjoy some additional tax benefits in comparision to others. Also Read - No Need to Meet Tax Officer in Case of Scrutiny Notice; Use Faceless Assessment: I-T Dept
Who is a Senior Citizen? Also Read - I-T Department Amends TDS Form to Make it Comprehensive
An individual resident is considered as Senior Citizen between the age group of 60 to 80 years, as on the last day of the previous financial year.
Who is Very Senior Citizen?
A Very Senior Citizen is an individual resident who is above 80 years, as on the last day of the previous financial year.
Why should Senior Citizens enjoy Income Tax Benefits?
As per the rich cultural heritage of the country, elders are always respected. They are taken care of in their old age with special care. Likewise, the Central government is working to keep the culture and moral values intact by offering special income tax benefits to senior citizens.
Here are some of the significant tax benefits Senior and Very Senior Citizens can enjoy:
As per the Section 80 D of the ITR law, senior citizens are given benefits on account of payment of the health insurance premium up to Rs50,000. Previously, this limit of deduction for health premium payment was Rs30,000 for them.
As per the law, the basic tax exemption limit for general citizens who are below 60 years of age is Rs 2.5 lakh, but for Senior Citizens, the exemption limit is Rs 3 lakh. Moreover for Very Senior Citizens, the limit is Rs 5 lakh.
No deduction under Reverse Mortgage Scheme
In case of emergency, senior citizens can reverse mortgage accommodation to make monthly earnings. However, the ownership of the property remains with them and they are given monthly payments for it. The amount paid in instalments to the senior citizen will not come under the Income Tax purview.
No Tax on Interest Income
General Citizens below 60 years of age can claim deduction up to Rs 10,000 on interest on Savings Bank Account(s) u/s 80TTA, but the case is different for Senior Citizens and Very Senior Citizens. They can claim ITR up to Rs 50,000 on interest on Savings Bank Account and other deposits.
No Advance Tax
Another interesting yet significant benefit for senior citizens is that they don’t have to pay any advance tax unless they have income under ‘Profits and Gains from Business or Profession’, while individuals below 60 years of age mandatorily have to pay advance tax if the estimated tax payable in a financial year is Rs 10,000 or more.
They Can file ITR Offline
E-filings of ITR-1 (Sahaj) and ITR-4 (Sugam) are not compulsory for Very Senior Citizens. They are free to choose any medium of filing ITR – online and offline both.