Table of Contents
Overview on Tax Concessions/ benefit for Resident Senior Citizens
So After a lifetime of working, raising families, and making a contribution to the success of this Nation other ways senior citizens deserve a dignified retirement.- Charlie Gonzalez
Every Nation Govt provides special specific relief to senior citizens in a number of modes & ways. There are numerous benefits provided to senior citizens under the provisions of Income Tax law.
Who are the Super Senior Citizens and Senior Citizens :
Any individual who attains the age of sixty years or more at any moment throughout the year shall be classified as a senior citizen under the Income Tax law. Unless they reached the age of 80 years, they are classified to be the "Super Senior Citizen." For e.g., Mr Ram was born on 31.03.1961, then he would be regarded as a senior citizen for the 2020-21 Financial Year, as he had passed the age of Sixty on 31.03.2021. Right from the benefit of higher basic exemption limits, there are a number of other benefits & compromises for senior citizens.
Following are Resources of income for senior citizens & super senior citizens
Senior citizens and super senior citizens normally receive incomes from the following sources –
- Senior citizen saving schemes
- Reverse mortgage schemes
- Rental income from renting out a house property
- Post office deposit schemes which also pay an interest
- Income from Capital Gains
- Interest on a savings account or fixed deposit schemes
- Pension
- And many others
Normally Forms Submitting for ITR by senior citizens and super senior citizens
Income tax is required to submit ITR by senior citizens and super senior citizens if they have any income during the financial year. Even if income is not chargeable to taxable, the ITR filling should be filed for claiming a tax refund or for proof of income earned during an FY. To submit an ITR, senior citizens and super senior citizens will have to take the below income tax forms depending on the nature/sources of their income –
|
ITR Form |
Nature of income |
|
In case total income up to Rs 50,00,000/- from salary and have enjoyed 1 house property, other sources or agriculture income up to INR 5k |
|
|
ITR 2 |
In case total Income more than 50,00,000/-, or from 2 house property, capital gains or agriculture income cross INR 5k |
|
ITR 3 |
Income from Business or Profession |
|
For presumptive income |
This is a comprehensive collection of the benefit available to senior citizens under the Income Tax Act-1961.
1. Higher Exemption limit in tax slabs:
Senior citizens are given a higher basic exemption limit. In comparison to the usual basic Exemption limit of INR 2.5 Lakhs, senior citizens enjoy the basic Exemption limit of INR 3 Lacs. The basic Exemption limit for super senior citizens is INR 5 lacs/-. It is required to be noted that a higher basic exemption limit just only available to resident persons not to just non-resident senior citizens.
Income Tax Slabs for Senior Citizens - Financial Year 2019-20
|
Income tax slabs |
Rate of tax |
Health and Education Cess |
|
Income up to ₹3 lakh* |
No tax |
NA |
|
Income between ₹3 lakh and ₹5 lakh |
5% |
4% of income tax |
|
Income between ₹5 lakh and ₹10 lakh |
20% |
4% of income tax |
|
Income that exceeds ₹10 lakh |
30% |
4% of income tax |
Income Tax Slabs for Super Senior Citizens (more than 80 years of Age) - Financial Year 2019-20
|
Income tax slabs |
Rate of tax |
Health and Education Cess |
|
Income up to ₹5 lakh* |
No tax |
NA |
|
Income between ₹5 lakh and ₹10 lakh |
20% |
4% of income tax |
|
Income that exceeds ₹10 lakh |
30% |
4% of income tax |
- Surcharge if total income is more than Rs.50 lakh and up to Rs.1 crore: 10% of income tax
- Surcharge if total income exceeds Rs.1 crore: 15% of income tax
2. Advance tax payment Exemptions –
Residential Senior citizens who do not have any taxable income under the heading "Income from Business or Professionals" shall be granted exemption from payment of Advance Tax. Interest Under section 234B & 234C for non-payment of Advance Tax is not applicable in such cases. It is required to be noted that there is no exemption for Interest Under section 234A and the late payment of taxes after the deadline would attract interest even also for senior citizens. Moreover, advance tax exemption is not applicable to non-resident senior citizens and they'll be required to pay interest Under sections 234B and 234C if payment is not done by way of advance tax.
3. Somemore deduction available on interest income Under Section 80TTB:
Resident senior citizens are eligible for a deduction of up to INR 50k for interest on bank deposits, post office deposits, savings banks, and co-operative society deposits. For certain classes of individual taxpayers, it is limited to INR 10k under Section 80TTA and it is also limited to interest on the savings bank account. Non-resident senior citizens are also liable for deductions up to INR. 10,000/-and, not Rs. 50k. In conclusion, also only resident senior citizens are entitled to the additional advantage of INR 40k.
4. Submitting the Income-tax Return Offline:
Online submitting of the Income-tax return form is not compulsory for Super Senior Citizens. Such super senior citizens could file paper returns provided they don't have any income under the head of "business or professional income."
5. Deduction towards Medical expenditure or medical insurance under section 80D: -
Senior citizens can enjoy special recognition under section 80D of the income tax act that provides for a deduction with respect to the medical expenditures/ medical claim policy incurred. The same is as below:
|
S. No |
Medical insurance Status |
Deduction available for |
Age 60 years or above |
Age Below 60 year |
|
1 |
Medical Insurance policy not taken – However medical expenditure incurred |
All the members of the family |
50,000 |
– |
|
|
For Parents |
50,000 |
– |
|
|
2 |
A medical insurance policy taken |
For members of the family |
50,000 |
25,000 |
|
|
For Parents |
50,000 |
25,000 |
A premium paid only up to INR 50k is eligible/available as a deduction to the Senior Citizens. Moreover, if medical insurance is not taken by Senior citizens, a deduction could also be claimed against medical expenditures incurred subject to a maximum threshold limit of INR 50k.
6. One more additional deduction Under Section 80DDB for specified diseases
Deduction for the medical treatment of particular diseases (such as AIDS or cancer etc.) of self-employed & family dependent members under section 80DDB is applicable to residents and Hindu undivided family. The Amount of deduction is as below:
(a) For persons under 60 years of age: INR 40k or Actual expenditure incurred, whatever is lower.
(b) In the case of a resident senior citizen (either an assessee or a Member of his or her family is a senior citizen): INR 1 Lacs or Actual Expenditure incurred whichever is lower.
Hence in the case of senior citizens, an additional deduction of Rs 60,000 is available under section 80DDB of the income tax act 1961.
7. No TDS by submitting Form 15H –
Form No. 15G/15H may be filed for non-deduction of Tax Deduction Sources in respect of the following income:
(a) on received of insurance commission (w.e.f 01.06.2017)
b) on received Interest income from banks and financial institutions
(c) on received of rental income on assets made available for commercial purposes (w.e.f 01.04.2019)
Usually, individuals can submit form No. 15G for non-deduction of Tax Deduction Sources(TDS) just if his/her total income doesn't exceed the maximum amount not chargeable to tax. But Resident senior citizens can file Form 15H to the payer of income even though the income of the person exceeds the basic exemption limit, subject to the condition that the tax liability is Nil.
7. Relief from Scrutiny of the Income-tax Returns-
In order to provide relief and reduce the burden to the senior citizens, Central Board of Direct Taxes has decided that in the cases of senior citizens & small taxpayers submitting income tax returns in ITR -1 & ITR-2 would be subject to scrutiny only where the income tax department has proper specific credible information [Press release No.402/92/2006-MC (07 of 2011) released by Central Board of Direct Taxes].
8. Standard deduction benefit :
A standard deduction of up to INR 40k toward income under the head salary received during the year was implemented from Assessment Year 2019-20 onwards. A senior citizen who earns pension income from his or her former employer can then claim a deduction of up to INR 50k against such employment income from Assessment Year 2020-21.
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