As the income tax filing deadline is nearing, it is important for senior citizens of the country to understand the specific provisions and benefits available to them under the Income Tax Act, 1961, ensuring a smoother tax filing experience.
In India, an individual aged 60 or above but less than 80 at any during the financial year is considered the category of senior citizen and those aged 80 or above is considered in the super senior citizen category.
The Income Tax Department of India offers several exemptions, deductions, and benefits for senior and super senior citizens to ease their tax burdens.
Tax Regimes for Senior Citizens and Exemption Limits
Senior citizens can choose between two tax regimes i.e the old or the new tax regime.
In the old tax regime, it allows deductions under Chapter 6A. In new tax regime, it excludes these deductions but has different tax rates.
For senior citizens from 60 to 79 years will have a basic exemption limit of Rs 3 lakh and for super senior citizens (80 years and above) will have a basic exemption limit of Rs 5 lakh.
The tax rates may vary, with no tax on income up to Rs 3 lakh and a 30 per cent tax rate on income exceeding Rs 10 lakh.
Senior Citizens | Freepik / Representative Image
What are the Income Tax Benefits for Senior Citizens?
- Health Insurance Premiums - Deductions up to Rs 50,000.
- Medical Expenses - Deductions up to Rs 1 lakh for specified diseases.
- TDS Exemption - Interest income up to Rs 50,000 from savings and fixed deposits is exempt from TDS if the total income is below Rs 5 lakh.
- Reverse Mortgage Scheme - Exemptions on capital gains under this scheme.
- Senior citizens without business income are exempt from paying advance tax
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Filing Income Tax Returns
Senior citizens can file their income tax returns both manually or electronically.
Pensioners who earn less than Rs 50 lakh can use ITR 1 (Sahaj) for filing.
While those with income from property, other sources, or capital gains should use ITR-2, while pensioners with business or professional income should file using ITR-3 or ITR-4.
Special Provision under Section 194P
Senior citizens aged 75 years or above, with only pension and interest income from a specified bank, can submit Form 12BBA to their bank. The bank will then calculate and deduct income tax, exempting them from filing an ITR.
