Income Tax benefits for senior citizens: Any person whose annual income is above the tax free limit, has to file his income tax return (ITR). The last date for filing income tax returns for the assessment year (AY) 2020-21 is 30 November 2020. It is applicable to file ITR for FY 2019-20. Senior citizens between the age of 60 and 80 years and very senior citizens above 80 years get some additional tax benefits. Let us know which such benefits these people get, which do not get taxpayer under 60 years.
For citizens below the age of 60, the tax exemption limit in a financial year is Rs 2.5 lakh. But for senior citizens, the exemption limit is Rs 3 lakh while for very senior citizens it is Rs 5 lakh.
Therefore, the senior citizen will not have to pay tax or file ITR, when his annual income is up to Rs 3 lakh and TDS has not been deducted in the financial year. Similarly, senior citizens are exempted from paying tax on the annual income up to Rs 5 lakh.
Reduction on payment of medical insurance premium
Under Section 80D of the Income Tax Act, medical insurance premiums up to Rs 50,000 paid by senior citizens are allowed as deduction. Deduction up to Rs 25,000 is available to other citizens.
Reduction on treatment of certain specified diseases
Under section 80DDB, senior citizen taxpayers can claim deduction up to Rs 1 lakh towards the expenses incurred on treatment of certain specified diseases. A person up to the age of 60 years can take deduction up to 40 thousand rupees on it.
Deduction on interest income
A person up to 60 years of age can claim deduction up to Rs 10,000 on interest on savings bank account. But you can claim deduction of up to Rs 50,000 on interest earned on saving and fixed deposits with Senior Citizen Bank or Post Office or Co-operative Bank.
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Discount on advance tax payment
According to section 208, every person whose tax liability is Rs 10,000 or more for a year, has to pay his tax in advance. However, section 207 provides relief to senior citizens on payment of advance tax. According to section 207, a senior citizen who has no income in business or profession, will not have to pay any advance tax.
Offline ITR filing
If very senior citizens are filing their returns in ITR 1 or ITR 4, then they can do it in paper mode. Its e-filing is not mandatory.