The Indian Earnings Tax Act provides sure tax advantages to Senior Residents and in addition tries to make sure that revenue tax e-filing is a problem free course of. The entire checklist of all of the tax advantages obtainable to senior residents is compiled on this article.
Who’s a Senior Citizen for Earnings Tax goal?
For the aim of Earnings Tax, there are 2 classes of Senior Residents
- Senior Residents: These above 60 years of age
- Tremendous Senior Residents: These above 80 years of age
Tax Advantages for Senior Residents
1. Advantages of Slab Charges
The revenue tax slab charges for senior residents are differential for senior residents as in comparison with non-senior residents. The slab charges are as follows
| Particulars | Non-Senior Citizen | Senior Citizen | Tremendous-senior Citizen |
| Tax Free | Upto 2.5 Lakh | Upto 3 Lakh | Upto 5 Lakhs |
| 5% Tax | 2.5 Lakh to five Lakh | 3 Lakh to five Lakh | NA |
Because the slab charges are useful to Senior Residents, this converts right into a tax saving of Rs. 5000 for the Senior Residents and Rs. 30,000 for the Tremendous Senior Residents. For full revenue tax slabs refer: Earnings Tax Slab Charges
2. Curiosity Earnings exempted upto Rs. 50,000
With impact from Monetary 12 months 2018-19, new Part 80TTB has been launched which permits for deduction for curiosity of Rs. 50,000. The quantity earned over Rs. 50,000 could be taxable as per the Slab Charges of the Senior Residents.
For eg: If a senior citizen earns curiosity revenue of Rs. 75,000, out of this – Rs. 50,000 could be allowed as a deduction underneath Part 80TTB and the stability Rs. 25,000 could be taxable as per the slab charges.
Nevertheless, it is very important observe that no deduction underneath Part 80TTA of Rs. 10,000 for Curiosity on financial savings account could be allowed in such instances.
3. Deductions underneath Part 80D for fee of Medical Insurance coverage Premium
The deduction allowed underneath part 80D for fee of medical insurance coverage premium is Rs 25,000 for non-senior residents. Nevertheless, this deduction will increase to Rs 50,000 for Senior Residents (elevated from Rs. 30,000 to Rs. 50,000 in Funds 2018 and relevant from 1st April 2018)
Furthermore, in case of very super-senior residents i.e. folks above the age of 80, deduction underneath Part 80D is allowed not just for fee for Medical Insurance coverage Premium but in addition for the precise expense incurred on remedy by very tremendous senior residents.
- Really helpful Learn: Tax Deduction for fee of Medical Insurance coverage Premium
4. Exempted from fee of Advance Tax
Senior Residents not having enterprise revenue are exempted from fee of any Advance Tax and are solely required to pay Self Evaluation Tax on their complete revenue (Inserted by Finance Act 2012)
5. Non-deduction of TDS on Curiosity
In case the entire revenue of a senior citizen is exempted from the levy of revenue tax and nil tax is payable by him for that monetary 12 months, he can submit Kind 15H for non-deduction of TDS on Curiosity on Mounted Deposit.
In case of Senior Residents, this way could be submitted if the Whole Earnings after Deductions is lower than the minimal quantity exempted from the levy of tax whereas in case of non-senior residents this way is relevant if the Whole Earnings earlier than deductions is lower than the minimal quantity exempted from levy of tax.
Thus, in case of Senior Residents the profit is greater and due to this fact Kind 15H is to be filed in case of Senior Residents whereas Kind 15G is to be filed in case of non-senior residents.
Really helpful Learn
- Kind 15H for Nil/Decrease Deduction of TDS
- Computation of Tax on Mounted Deposit
The brink for deduction of taxes underneath Part 194A in case of senior residents has additionally been raised from Rs 10,000 to Rs. 50,000. This modification was launched in Funds 2018 and is relevant from FY 2018-19 onwards.
6. Increased Deduction underneath Part 80DDB for ailment of specified illness
Part 80DDB offers deduction to an assessee in case of expense on medical remedy of specified illnesses. The deduction allowed underneath this part earlier was Rs. 60,000 for Senior and Rs. 80,000 for Tremendous-Senior Residents.
This has now been elevated to Rs. 1,00,000 for each Senior and Tremendous Senior Residents with impact from FY 2018-19. [Amendment introduced vide Budget 2018]
7. No Tax on quantity acquired underneath Reverse Mortgage Scheme
Reverse Mortgage is the alternative of Dwelling Mortgage. In a Dwelling Mortgage, you pay EMI’s to the Financial institution and also you personal the home subsequently. Underneath the Reverse Mortgage Scheme, common fee is made to Senior Residents until lifetime by mortgaging his home whereas the possession stays with the senior citizen and he additionally occupies the home.
As per the Reverse Mortgage Scheme, on the loss of life of the borrower, the mortgage is repaid with collected curiosity by sale of the home property and the stability quantity acquired on sale is given to the authorized heirs.
The quantity so paid as installments to the Senior Citizen is absolutely exempted from the levy of Earnings Tax.
- Really helpful Learn: Instalments underneath Reverse Mortgage to be utterly Tax Free
Different Related Factors
- From Monetary 12 months 2018-19 onwards, Senior Residents getting Pension Earnings may declare Commonplace Deduction of Rs. 40,000 from their Pension Earnings.