Income Tax Benefit available to Senior or Super Senior Citizens for FY 2019-20 (A.Y.2020-21)

 Income Tax Act,1961 offer several tax benefit and compliance relaxation to senior citizen and super senior citizen. Here we are providing a list of benefits available to them. First of all, we have to know who is consider as SENIOR or  SUPER SENIOR CITIZENS .

SENIOR CITIZEN

Senior Citizen means a resident individual, who is of the age of 60 years or more, but less than 80 years, at any time during the relevant previous year.

SUPER SENIOR CITIZEN

Super Senior Citizen means a resident individual, who is of the age of 80 years or more at any time during the relevant previous year.

As per CBDT Clarification Circular No 28/2016 dated 27th July 2016  an individual born on 1st April would complete each year of his age on 31st March, i.e. for FY 2019-20 (AY 2020-21), the date of birth (DOB) of individual should be on or before 1 April, 1960/ 1940 to complete 60/ 80 years of age on or before 31 March 2020, for getting income tax benefits/ status as a senior/ very senior citizen, respectively.

Now, here are some important and significant Benefit to Senior Citizen that help him to plan his financial security post retirement .



SLEB RATE BENEFITS:

Senior and Super senior entitled to higher basic exemption limit as compare to normal individual assessee.

  • The basic exemption limit available to Senior citizen is Rs. 300,000.
  • The basic exemption limit available to Super senior citizen is Rs. 500,000.
  • The basic exemption limit available to Other Individual Assessee is Rs. 300,000.

ADVANCE TAX BENEFIT

  • As we know that every person whose estimated tax liability for PY exceed Rs. 10,000 is required to pay advance tax as per Act. (Sec 208 of Income Tax Act ) 
  • Now, there are a big relaxation to Senior as well as Super senior citizen that they don't need to pay advance tax if not having income from "Business or Profession". ( Sec 207 of Income Tax Act)

TAX  BENEFITS ON DEPOSITS

  •  Senior Citizens as well as Super senior citizens get deduction of Rs. 50,000 on interest earned on deposits with banks, post office and cooperative bank or society engaged in business of banking. These deposits will include both Saving accounts as well as time deposits. ( Sec 80TTB of Income Tax Act) 
  • Further, No tax shall be deducted at source for payment of interest by Bank or post office or cooperative bank to senior or super senior citizens up to Rs 50,000.( Sec 194A of Income Tax Act)
  • Non Senior citizens get deduction of Rs. 10,000 on interest earned on Saving Bank Account only. ( Sec 80TTA of Income Tax Act)

TAX BENEFIT ON MEDICAL 

  • They are entitled to claim  duction of  up to Rs. 50,000 for medical insurance premium and health check up for himself , spouse and children. Further if they pay premium for their parents additionally up to  Rs. 50,000 would be allow as deduction. (Sec 80D of Income Tax Act)
  • For Treatment of specified diseases of Senior citizens, deduction up to Rs. 100,000 is allowed.(Sec 80DDB of Income Tax Act )

NO TAX UNDER REVERSE MORTGAGE SCHEME

A senior citizen may reverse mortgage any of his accommodation to make monthly earning. Amount receive  by senior citizen in installment is exempt under income tax .

OTHER BENEFITS

  • Standard deduction of Rs. 50,000 on account of their pension income
  • It is not mandatory for them to file income tax return online. They can file it manually.


Thus, there are some special benefits provided for Senior or Super senior citizens in Income Tax Act. 

Further they have to take care of that even if basic exemption limit is Rs 300,000/500,000 but if we wants to take TDS refund then Income Tax Return filling is compulsory  

 

 

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