Know 5 Facts Benefits for Senior Citizens regarding income tax

Know 5 Facts Benefits for Senior Citizens regarding income tax

Important Facts about Senior Citizens in India and Income Tax Law provisions and benefits

1-
What are the benefits available to a senior citizen and very senior citizen in respect of tax rates?

Senior citizens and a very senior citizen are granted a higher exemption limit as compared to normal tax payers. Exemption limit is the quantum of income up to which a person is not liable to pay tax.

The exemption limit granted to senior citizen and very senior citizen for the financial year 2017-18 is as follows

A senior citizen is granted a higher exemption limit compared to non-senior citizens. The exemption limit for the financial year 2016-17 available to a resident senior citizen is Rs. 3,00,000.

The exemption limit for non-senior citizen is Rs. 2,50,000. Thus, it can be observed that an additional benefit of Rs. 50,000 in the form of higher exemption limit is available to a resident senior citizen as compared to normal tax payers.

A very senior citizen is granted a higher exemption limit compared to others. The exemption limit for the financial year 2016-17 available to a resident very senior citizen is Rs. 5,00,000.

The exemption limit for non-senior citizen is Rs. 2,50,000. Thus, it can be observed that an additional benefit of Rs. 2,50,000 in the form of higher exemption limit is available to a resident very senior citizen as compared to normal tax payers.

2-
At what age a person will qualify as a senior citizen and very senior citizen under the Income tax law?

Before understanding the age criteria, it is very important to know that the tax benefits offered under the Income-tax Law to a senior citizen/very senior citizen are available only to resident senior citizen and resident very senior citizens.

In other words, these benefits are not available to a non-resident even though he may be of higher age.

The age and other criteria to qualify as a senior citizen and very senior citizen under the Income-tax Laware as follows:

Criteria for senior citizen –
a-Must be of the age of 60 years or above but less than 80 year at any time during the respective year.
b-Must be resident

Criteria for very senior citizen-
a-Must be of the age of 80 years or above at any time during the respective year.
b- Must be resident

3-
Is a very senior citizen granted exemption from e-filing of income tax return?
From the assessment year 2017-18 onwards any taxpayer filing return of income in Form ITR 1/4 and having a refund claim in the return or having total income of more than Rs. 5,00,000 is required to furnish the return of income electronically with or without digital signature or by using electronic verification code.

However, Income-tax Law grants relaxation from e-filing in above case to very senior citizen.

In other words, a very senior citizen filing his return of income in Form ITR 1/4 and having total income of more than Rs. 5,00,000 or having a refund claim can file his return of income in paper mode, i.e., for him e filing of ITR 1/4 (as the case may be) is not mandatory. However, he may go for e-filing if he wishes.

4-
Is a Resident senior citizen granted exemption from payment of advance tax?
As per section 208, every person whose estimated tax liability for the year is Rs. 10,000 or more, shall pay his tax in advance, in the form of "advance tax".

However, section 207 gives relief from payment of advance tax to a resident senior citizen.

As per section 207 a resident senior citizen (i.e., an individual of the age of 60 years or above during the relevant financial year) not having any income from business or profession, is not liable to pay advance tax.

5-
What are the benefits available in respect of expenditure incurred on account of medical treatment of specified diseases on treatment of a senior citizen or a very senior citizen?

section 80DDB of the Income-tax Law gives various provisions relating to tax benefits available on account of expenditure on medical treatment of specified diseases.

Very Senior Citizen - Section 80DDB helps in a tax deduction of up to INR 80,000 for the people above the age of 80 years.

senior citizens can avail benefits of up to INR 60,000 and others can avail tax benefits of up to INR 40,000 for medical purposes.

These tax deductions are available if medical expenses are incurred in treating certain medical conditions such as:
a-Hematological Disorders
b-Neurological Diseases
c-AIDS
d-Chronic Renal Failure
e-Malignant Cancers

5-
What are the benefits available in respect of expenditure incurred on account of medical insurance premium or medical expenditure to a senior citizen or very senior citizen and on account of?

Section 80D of the Income-tax Law gives various provisions relating to tax benefits available on account of payment of medical insurance premium and other related items.

As per Section 80D, a taxpayer can claim deductions on health insurance premiums paid for self/family and parents, apart from deductions on expenses related to health check-ups.

Section 80D is meant exclusively for deductions on health insurance premiums paid.

Reality views by sm –

Friday, September 22, 2017

Tags – Senior Citizens Very Senior Citizens Income Tax Law