TAX BENEFITS NOT TO BE MISSED BY SENIOR CITIZENS
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TAX BENEFITS NOT TO BE MISSED BY SENIOR CITIZENS
Who is a senior and very senior Citizen under Income tax Act?
Income tax Act 1961 categorizes senior citizens into senior and very senior citizens:
SENIOR CITIZEN: Those who have attained the age of 60 years or above are senior citizens and must be resident.
VERY SENIOR CITIZEN: Those who have attained age of 80 years or above are very senior citizens and must be resident.
BENEFITS ENJOYED BY SENIOR CITIZENS UNDER INCOME TAX:
LOWER TAX SLAB RATES: A senior citizen is given a higher exemption limit as compared to non senior citizens. The exemption limit granted to senior citizens and very senior citizens is Rs 3 lakhs and 5 lakhs which is higher than the exemption limit of Rs 2.5 lakhs granted to non senior citizens. Therefore, senior citizens and very senior citizens enjoy additional exemption benefit of Rs 50,000 and Rs2, 50,000 respectively.
EXEMPTION FROM E-FILING OF RETURN: From AY 2019-20 a very senior citizen (80 years or above of age) is exempted from E-filing of ITR1/ITR4. They can file it in paper mode. Here it is important to note that such exemption has not been granted to senior citizens (60 years or above).
BENEFITS IN RESPECT OF INTEREST INCOME: Section 80TTB of the Income tax Act 1961 provides tax benefit to senior citizens on account of interest income earned on deposits with bank (both savings and fixed) or post office or co-operative banks of an amount up to Rs50,000.
BENEFIT IN TERMS OF MEDICAL TREATMENT: Section 80D provides additional deduction for payment of medical insurance premium up to Rs 50,000 as compared to non senior citizens who are given a deduction of up to Rs 25000.
EXEMPTION IN ADVANCE TAX PAYMENT: As per Section 208 of Income Tax Act 1961 every person whose estimated liability towards tax is Rs 10000 or more are required to pay tax in advance. However, Section 207 provides relaxation to a resident senior citizen (citizen of age 60 years or above) not having income from business or profession by removing the requirement of paying advance tax.
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