Tax Benefits for Senior Citizens in India

Any person who has attained the age of 60 years or above is a Senior Citizen in India. Those who are 80 years or above are considered as very Senior Citizens. Various tax benefits are admissible to them depending upon their age and facilities availed:

(a) Income Tax & Age: For senior citizens below 80 years age income upto Rs. 3 lakh per annum is exempt from Income Tax. For senior citizens who are 80 years and above income upto Rs. 5 lakh per annum is exempt from Income Tax. You may refer to the Indian Income Tax Department for more details.

(b) Benefit under Section 80C: The benefit of Section 80C of the Income Tax Act, 1961 has been extended to the investments made under 5-Year Post Office Time Deposits Account and Senior Citizens Savings Scheme, with effect from 01.04.2007.

(c) Benefit for medical insurance under Section 80D: Payment made by a senior citizen towards health insurance premium is tax exempt under section 80D of Income Tax Act 1961. Tax deduction of Rs. 30,000 can be availed from assessment year 2016-17. A combined tax deduction of Rs. 60,000 can be availed by senior citizens who are also paying medical insurance premium for their parents.

(d) No tax on reverse mortgage loan: Money received through reverse mortgage is treated as loan and not income. Hence the amount is not liable to income tax.

(e) Form 15H for non-deduction of TDS: Senior citizens can claim non-deduction of TDS (tax deduction at source) on investments earning interest (like Fixed Deposits) by filling and submitting Form 15H every year for availing this benefit.

(f) Scrutiny of IT Returns: Income Tax department would not do any routine scrutiny of IT Returns of Senior Citizens unless the department has some real credible information to initiate scrutiny proceedings.

(g) E-filing of IT Returns not mandatory: Very senior citizens are exempt from e-filing their IT Returns. Considering their age and probable discomfort with technology they are allowed to file their IT Returns in paper format.

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