Top Tax Benefits Available for Senior Citizens
Published On Mar 17, 2019 5:30 AM By Sakshi Aggarwal
In India, any person above the age of 60 is considered a senior citizen under the Income Tax Act. This article discusses the income tax benefits for senior citizens in our country. But before we proceeding, let us understand the criteria of the senior citizen and very senior citizen in our country.
A senior citizen must be a minimum of 60 years and maximum 80 years of age. Whereas to be considered as a very senior citizen, an individual must be of minimum 80 years of age. Also, both of them must be citizens of India.
Following are the exemptions that the senior citizens enjoy in India-
1. Higher limit of exemption for the senior citizens
Since the financial year 2011-2012, the age to qualify for senior citizens has been changed from 60 years. Earlier, it was 65 years. Also, the limit of exemption for them has been revised to Rs. 3 Lakh from Rs. 2.5 Lakh. From the assessment year 2012-13, they are eligible for an enhanced tax exemption of up to Rs. 5 Lakh.
A fresh category is created for very senior citizens for the people aged 80 years or more. They are eligible for an enhanced tax exemption of up to Rs. 5 Lakh. Limitation of tax deduction offered to a senior and very senior citizen is tabulated below:
Very Senior Citizen
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2. Benefit of the reverse of mortgage
Under this concept, a senior citizen can avail of monthly income mortgaging his/her house.
3. Increased tax benefits for senior citizens on health insurance
A senior citizen is eligible for Rs. 20,000 of tax deduction under Section 80D. The same limit has been increased from AY 2016-17 to Rs. 30,000.
4. Tax benefit for medical expenditure expense of a very senior citizen
From the AY 2016-17, any medical expenditure made on a very senior citizen shall be permissible for a deduction under section 80D. This is applicable if nothing has been paid to keep the health insurance of that person in force, as is not greater than Rs. 30,000.
5. Higher deductible under section 80DDB for senior and super senior citizens
In expenses related to healthcare treatment of some particular ailments, the assessee gets a deduction of generally up to Rs. 40,000 under section 80DDB. However, in the case of a senior citizen, the deduction can be allowed of Rs. 60,000.
A higher deduction limit of up to Rs. 80,000 from the year 2016-17 can be allowed for expenditure incurred in the treatment of a very senior citizen, who is an individual who is a resident of India and is 80 years or above in age.
6. Senior citizens are granted a greater amount of interest on a 5 year FD (Fixed Deposit). Under Section 80 C, it can be deducted from the entire income.
7. Senior citizens may claim an exemption on TDS on the interest that income has gained on deposits. They are required to submit a Form 15H under Section 197 of the IT Act to avail of this benefit.
Now you know the importance of health insurance for senior citizens and very senior citizens in India. Apart from health insurance plans, there are a few programs that the government runs to offer certain tax benefits to senior citizens. But with health insurance, tax benefits come along as the icing on the cake. So, if you are a senior citizen/very senior citizen or have a senior/very senior citizen parent, then get your/their health-insured for a healthy life.
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