New Delhi: While there are several income tax benefits for taxpayers in India, some of those can only be availed by senior citizens. As per the rules, a person between 60 years and 80 years of age is termed as a ‘senior citizen’ and a person above 80 years of age is a ‘very senior citizen.’
As per Income Tax Rules, benefits available to resident senior and very senior citizens range from higher exemption limit to deductions. For FY 2020-21, the exemption limit for a senior citizen is Rs 3 lakh. The exemption limit for non-senior citizen is Rs 2.5 lakh. An additional benefit in the form of Rs 50,000 is available to a resident senior citizen. Very senior citizens are granted a higher exemption limit of Rs 5 lakh.
The senior citizens and super senior citizens are also exempted from the payment of advance tax. This benefit is extended under section 207 of the income tax. A resident senior citizen not having any income from business or profession is not liable to pay advance tax. Very senior citizens filing return of income in Form ITR 1 or ITR 4 can file their income tax return in paper mode. This means that for very senior citizens, electronic filing of ITR 1 or ITR 4 (as the case may be) is not mandatory.
Also, interest earned on saving deposits and fixed deposit with banks or post office or co-operative banks for an amount up to Rs 50,000 earned by the senior citizen is eligible for deduction under Section 80TTB of Income Tax Act.
There will be no deduction up to Rs 50,000. However, the taxpayers should know that this limit of Rs 50,000 has to be computed for every bank individually.
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