Tax Benefits Available to Senior Citizens
Introduction
The following blog post discusses the income tax benefits available to senior citizens in India. Under the Income Tax Act, a person becomes a senior citizen in any year after reaching the age of 60, even if just for one day. When he reaches the age of 60, his position as a senior citizen in that fiscal year provides him with some respite. There are little income tax benefits offered to senior folks.
What tax benefits are available to older citizens and very senior citizens?
Seniors and very senior citizens have a higher exemption limit than other taxpayers. The exemption limit is the amount of income that a person is not required to pay tax on. The exemption limit for older citizens and very senior citizens for fiscal year 2022-23 is as follows:
- Senior citizen: A senior citizen has a greater exemption limit than non-senior citizens. A resident senior citizen’s exemption ceiling for the fiscal year 2022-23 is Rs. 3,000,000. Non-senior citizens are exempt up to Rs. 2,50,000. As a result, a resident elderly person receives an additional advantage of Rs. 50,000 in the form of a higher exemption limit when compared to other taxpayers.
- Very senior citizen: A very senior citizen has a larger exemption limit than others. The exemption limit given to a resident very senior citizen for the fiscal year 2022-23 is Rs. 5,000. Non-senior citizens are exempt up to Rs. 2,50,000. As a result, a resident who is a very senior citizen receives an additional advantage of Rs. 2,50,000 in the form of a higher exemption limit when compared to regular tax payers.
When does a person become a senior citizen or a very senior citizen under the Income-Tax Law?
When going into the age criterion, it is critical to note that the tax benefits granted to a senior citizen/very senior citizen under the Income-tax Law are only available to resident senior citizens and resident very senior citizens. In other words, even if a non-resident is older, he cannot receive these advantages. The age and other criteria for qualifying as a senior citizen or extremely senior citizen under the Income-tax Law are as follows:
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Must be at least 60 years old but no older than 80 years old at any time during the year. | Must be 80 years old or older at any time during the year. |
A resident is required. | A resident is required. |
Is a very senior citizen excluded from e-filing their income tax return?
A very old citizen making his return of income in Form ITR 1/4 can do so on paper; e-filing of ITR 1/4 (as the case may be) is not required for him. He may, however, file electronically if he so desires.
Does a senior resident receive a waiver from paying advance tax?Â
A person must pay their tax in advance in the form of “advance tax” in accordance with Section 208 if their expected tax due for the year is Rs. 10,000 or more. A resident elderly citizen, on the other hand, is exempt from paying advance tax under Section 207. A resident senior citizen (defined as a person who was 60 years of age or older during the relevant financial year) who did not get any income from their company or profession is not required to pay advance tax, according to section 207.
What are the advantages seniors have when it comes to interest on deposits?
A senior citizen, defined as someone who is 60 years of age or older, is entitled to tax benefits under Section 80TTB of the Income Tax Law on account of interest income from deposits with banks, post offices, or cooperative banks up to a maximum of Rs. 50,000. Savings accounts and fixed deposits both have interest earned on them that is eligible for deduction under this clause. Section 194A of the Income Tax Act provides that no tax shall be deducted at source on payments of interest to a senior citizen by a bank, post-office, or co-operative bank up to Rs. 50,000. As a result, each bank’s limit must be calculated independently.
Conclusion
In conclusion, senior citizens are eligible for a variety of tax incentives that might assist them lower their financial burden. These advantages include increased standard deductions, enhanced deductions for medical expenses, exclusions from certain types of income, and tax credits for retirement savings. Taking advantage of these tax breaks can greatly improve the financial well-being of senior persons, providing them with essential assistance during their retirement years.
