TAX BENEFITS FOR SENIOR CITIZENS

When one retires, he deserves to live a peaceful life but sometimes the complex Tax laws can be troublesome for Senior Citizens. In order to reduce the hardships, various income tax benefits are now available to senior citizens. This article summarizes certain beneficial provisions of Income tax, applicable to senior citizens.

Who is Senior Citizen under Income Tax? :- As per provisions of Income Tax, a person who has completed 60 years of age at any time during the Financial Year 2012-2013 is considered as senior citizen, to determine his/her Income Tax Liability for the said Financial Year. A new category i.e. super senior citizen has been introduced recently, which covers persons, who are of the age 80 or above at any time during the Financial Year.

Threshold of Income for Income Tax- A senior citizen is exempt from Income Tax in case, his /her income during Financial Year 2012-2013, does not exceed Rs.2,50,000/- and in case of Super Senior Citizen, taxable Income earned up to Rs.5,00,000/- is exempt from Income Tax.

Additional Deduction u/s 80D-The amount of deduction available to senior citizens under section 80D for premium paid for medical insurance is Rs.50,000/

Additional Deduction u/s 80DDB- This section deals with deduction towards expenses of medical treatment of specified diseases. The amount of deduction is as follows:

Advance Tax payment-Senior citizens who are resident in India and not having Business income are exempt from payment of advance tax and as a consequence no interest U/s 234B (for nonpayment of advance tax) and/or U/s 234C (for periodic installments) will be chargeable.

Relief from Scrutiny of IT-Returns-As per press release of Central Board of Direct Taxes(CBDT) No.402/92/2006-MC (07 of 2011) , One more very important benefit available for senior citizens is that there is no regular scrutiny for them, except for exceptional cases. In order to reduce the hardships for senior citizens, it was decided by CBDT that cases of senior citizens and small taxpayers, filing income-tax returns in ITR-1 and ITR-2 will be subjected to scrutiny only where the Income Tax department is in possession of credible information.

Tax Deduction at Source- People have to face a lot of problems to claim Income Tax Refund of excess tax deposited with Income Tax Department. Senior citizens can claim exemption on the tax deducted at source (TDS) on interest income earned on deposits. It can be done by submitting Form 15H under Section 197 of the IT Act.

      The Income Tax department has roped in above mentioned provisions to allow additional benefits to Senior Citizens. In the coming years, the Income Tax department should allow some additional Tax benefits to Senior Citizens in the form of some additional deductions on interest income etc, since Senior Citizens have played a very important  role in the progress of nation by contributing towards taxes out of their hard earned income and they deserve to get some additional tax benefits to lead a peaceful life post retirement . We hope that this article will help you understand and avail various Benefits available under provisions of Income Tax for senior citizens.