TAX BENEFITS AND EXEMPTIONS FOR SENIOR CITIZENS
Like every year’s budget for 2019-2020 also came out with some promising tax exemptions for one of the most relevant section of the society the senior citizens. Apart from regular consideration the exemptions are given keeping in mind the high medical inflation rates and the falling interest rates. In order to assist the senior citizens various incentives, tax benefits and exemptions are provided to the senior citizens. Through the course of this article we will be taking a look at the various tax benefits and exemptions offered to senior citizens in India vide 2019-2020 finance budget.
Who is considered as Senior Citizen?
Prior to moving forward it is vital for us to understand that who is considered as senior citizen in India. According to Income tax act 1961 every person who is of age not below the age of 60 and not more than the age of 80 calculated on the last day of the previous year is considered as senior citizen. We can say that people who are born before 1st April 1955 and after 1st April 1935 are considered as senior citizens.
Exemption and Incentive
Tax Slabs- The taxation slab for the regular taxpayers currently is 2,50,000 that the persons who have a annual income upto 2,50,000 are not required to pay the income tax. While this limit for the senior citizen is rs 3,00,000 and super senior citizens who are above 80 years of age is 5,00,000. That gives the benefit of 50,000 to the senior citizens.
Section 80 D- Under section 80 D every taxpayer is allowed a deduction for a specific amount to be paid for the recognized health policies for the person himself or for his family. Earlier the deduction limit for the regular taxpayer under this section was Rs 25000 and for senior citizens this deduction amount was Rs 30,000. However, with the latest budget this limit has been increased to Rs 50,000 i.e. if a person is a senior citizen he can claim a deduction of 50,000 while paying his income tax.
Section DDB– This section provides for the deduction for the amount invested in the treatment of special diseases. With the recent budget introduced the limit for medical treatment expenses for specialized diseases has been increased to Rs 1,00,000 for all citizens above 60 years of age. Prior of this amendment the limit for the specialized medical treatment expenses was Rs60,000 for senior citizens (above 60 years) and Rs80,000 for super senior citizens (above 80 years).
Standard Deduction- Currently the standard deduction of Rs 40,000 to every taxpayer including the senior citizens earning the post retirement pension while earlier only the working people were allowed to take this deduction.
Advance Tax- In India every taxpayer is required to make the advance payment of the tax to the tax authorities after calculating their estimate tax liability. However as special incentive the senior citizens are exempt from paying any amount of advance tax.
Tax benefit under reverse mortgage scheme – The benefit of reverse mortgage scheme is given to the senior citizens wherein they can monetize their property value and get EMI and return. The tax benefit which the senior citizens get here is that any income arising from this scheme is entirely exempted.
Apart from the tax benefits there are several other benefits that are provided to the senior citizens in order to honor them and assist them in the hour of need. Thus efforts are made to collect the minimum possible taxes on the income that arise to the senior citizens out of pensions, grants, jobs, business etc.