SENIOR CITIZEN INCOME TAX BENEFITS:
SECTION 80TTB AND OTHERS
The budget for the year 2018 panned out really well for senior citizens. With the introduction of a new section 80TTB, the senior citizens are exempted from taxes to a large extent. Since old age takes its toll on a person’s health and pocket, the Finance Ministry has taken special care of the elderly with the introduction of a new section to the Income Tax Act, Section 80TTB.
This section gives senior citizens relaxations in tax payable. Various deductions are introduced for the senior citizens under two categories: Senior Citizen and Super Senior Citizen.
The following people qualify to be called:
Senior citizens if age <= 60 years
Super Senior Citizens if age <= 80 years
PROVISIONS UNDER SECTION 80TTB
|SLAB RATES||NON-SENIOR CITIZEN/ NORMAL CITIZEN||SENIOR CITIZEN||SUPER SENIOR CITIZEN|
|TAX-FREE INCOME (IN LAKHS)||UP TO 2.5||UP TO 3||UP TO 5|
|5% (IN LAKHS)||2.5 – 5||3 – 5||NA|
EXEMPTION OF INTEREST INCOME UPTO Rs. 50000
Earlier the senior citizens were exempted up to Rs.10000 on the interest income but now it has been extended up to Rs. 50000.
Suppose interest income = Rs.1,00,000
Exempted income = Rs. 50,000
Taxable income = Rs. 50,000 as per the applicable slab rate.
Additionally, up to Rs. 10,000 exempted on a savings account.
DEDUCTIONS UNDER SECTION 80D FOR PAYMENT OF MEDICAL INSURANCE
Given the problems and diseases old age comes with, the premium payment exemption limit for medical insurance has also been revised for senior citizens.
For non-senior citizens, the limit is up to Rs. 25000
For senior citizens, the limit is up to Rs. 50,000
For super senior citizens, the deductions are allowed not only for the premium payment but also for the actual expense incurred.
EXEMPTION FROM PAYMENT OF ADVANCE TAX
Senior citizens are exempted from the payment of advance tax if there is no business income. They are only supposed to pay the self-assessment tax to be paid on the total income.
NO DEDUCTION OF TDS ON INTEREST
For senior citizens, there are no deductions of TDS on the interest earned up to Rs. 50,000.
EXEMPTION ON LIMIT FOR MEDICAL EXPENDITURE
For senior and super senior citizens, the tax deduction limit on medical expenses in case of special critical illness has also been increased from Rs. 60,000 and Rs. 80,000 to one lakh each.