For instance, there is a higher exemption limit for senior citizens at the time of filing tax return and higher deduction towards medical expenses for specified diseases. Senior citizens are also allowed income tax deduction on interest income they stand to earn from savings accounts and fixed deposits.
Income tax benefits offered to senior citizens
I. Deduction on medical insurance premium: While regular citizens are offered a maximum of ₹25,000 deduction in form of medical insurance premium, senior citizen are entitled to claim maximum of ₹50,000 for senior citizens.
II. Medical expenses for specified diseases: Senior citizens are also entitled to claim up to ₹1 lakh under 80DDB for treatment of specified diseases as compared to ₹40,000 for those aged below 60.
III. Interest income on savings and fixed deposits: Senior citizens and super senior citizens are also allowed a deduction of up to ₹50,000 on interest income they earn from savings accounts, fixed deposits and recurring deposits (RDs) in banks and post offices.
IV. Exempt from filing ITR: Additionally, the basic exemption limit for taxpayers is ₹2.5 lakh, whereas it is higher for the senior citizens i.e., ₹3 lakh and ₹5 lakh for super senior citizens. This means citizens above the age of 60 do not need to pay any income tax for annual income upto ₹3 lakh.
Additionally, section 194P of I-T Act, 1961 introduced in 2021 provides conditional relief to taxpayers above the age of 75 from filing tax returns.
For all personal finance updates, visit here
