Senior Citizen Tax Benefit: Exclusive Benefit For Senior Citizens In Income Tax 2023

Senior Citizen Tax Benefit

As we age, our earning capacity also decreases and with the same medical expenses also increase. Keeping these things in mind, exclusive benefits have been given for senior citizens in the Income Tax Act.

Talk about the benefits available to senior citizens. Before that you need to know that who is the Senior Citizen According To Income Tax Act? Any person who is 60 years of age or more and less than 80 years of age is called a senior citizen.

According to the Income Tax Act, if a person turns 60 on any financial day, then he will be considered a senior citizen and those who are 80 or above, they will be called a super senior citizen or a separate category of very senior citizen has been given.

Now let’s talk about what are the benefits:–

Higher Exemption Limit :

If any person earns less than that limit then he need not pay income tax. The limit that is there is 2.5 lakh rupees for a normal taxpayer, but the same limit for senior citizens is ₹ 3 lakh. Senior Citizen Tax Benefit

Senior citizens get a benefit of ₹ 50,000 in comparison to a normal taxpayer. If any senior citizen earns up to ₹ 3 lakh per annum, then he does not need to pay any income tax and if he earns more than ₹ 3 lakh, then no tax will have to be paid on income up to ₹ 3 lakh.

Senior Citizen Tax Benefit

Payment of advance tax :

According to section 208, if the estimated tax liability of any person, ie, the tax liability on the estimate exceeds ₹ 10,000, then that person has to pay tax in the form of advance tax.

That is, there is a specified date of advance tax, before that date they have to be paid first. But this relief has been given to senior citizens. That is, there is no need to pay advance tax, irrespective of the tax liability of the senior citizen.

But if the senior citizen’s income is coming from business, then he will have to pay advance tax. Senior Citizen Tax Benefit

Apart from business, income from salary from any other sources is coming from anywhere from house property. Senior citizens do not need to pay advance tax.

How to save income tax
fixed deposit rules according to income tax act
make money in forex market
what is TDS ?

Interest ON Deposit :

Senior Citizen Tax Benefit

If any person has income from interest, according to section 88A. That is, the income from your interest from the savings account will be tax free up to ₹ 10,000.
Income above that will be taxed

But section 88B was made for senior citizens, in which the interest of both the savings account and FD was found that if it is less than ₹ 50,000, then no tax is to be paid.

But if that income exceeds ₹ 50,000 then that additional income will be considered taxable and you will have to calculate the tax duty on that income.

This limit is for less than 60 years, it is only 10000 and that amount is calculated only on the interest of the savings account. Senior Citizen Tax Benefit

TDS On Interest :

According to section 194, if you are getting interest from anywhere. If you are getting interest from bank, corporate, post office, from anywhere, then TDS has to be deducted from whichever bank you are getting interest.

If your interest income is more than ₹ 40,000 then the bank that will pay you will deduct TDS. The bank will deduct TDS of 10% from that interest amount and you will be paid the debt amount.

But for senior citizens, this amount is 50,000 instead of 40000.

If the interest of the senior citizen is coming from any particular bank and it is more than 50,000 then only then the bank will collect your TDS. If your interest is less than ₹ 50,000, the bank will not deduct your TDS.

It is calculated according to different banks, but if you have submitted Form 15 G or Form 15 H, then no TDS will be deducted. Senior Citizen Tax Benefit

Medical insurance premium :

Senior Citizen Tax Benefit

According to section 80B, if any person has got medical insurance and if he pays the amount of premium of that insurance, he gets deduction for the amount he pays.

That is, the amount you will pay as insurance premium. You can claim it as a deduction under the Income Tax Act.You will not have to pay tax on that income.

The maximum limit it has is ₹ 25,000. That is, if you have paid annual medical insurance premium up to ₹ 25,000, then you will get its deduction and you will not pay income tax on it.

But if you are a senior citizen then that limit of 25000 becomes directly double for you. That is, there is a limit up to ₹ 50,000. Senior Citizen Tax Benefit

Super senior citizens :

For those who are super senior citizens i.e. those who are above 80 years, an additional benefit has been given in the Income Tax Act that they also have the option of filing income tax returns offline.

The filing is not mandatory. You can file if you want. This benefit is given only for people above 80.

No Income Tax Return for Senior Citizen :

Senior Citizen Tax Benefit

This is a new section inserted. Section 194B This is for those people whose age is above 75, they have been given an additional benefit. What is this benefit?

If the income of those people is only from interest and pension. If there are only two sources of income, apart from this there is no other source, then there is a provision in the Income Tax Act for those people.

According to section 194b, they do not have to file income tax returns. That is, in whichever bank his pension comes and has got FD done. They have to give a declaration in that bank. Senior Citizen Tax Benefit

In that declaration, they have to declare that apart from our pension and interest, there is no other source of income, so we will not file income tax return.

Then what will the bank do, whatever tax is generated by them, the bank itself will calculate it and submit it to the Income Tax Department. Those people above 75, whose income comes from interest and pension, there will be no need to file income tax returns.

How much income is tax-free for senior citizens

The maximum deduction amount is ₹ 1 lakh 

Is advance tax applicable for senior citizens

a resident senior citizen age of 60 years or above during the financial year not having any income from business or profession is not liable to pay advance tax

Who is a super senior citizen for income tax purposes?

A Super Senior Citizen is  80 years or above, at any time during the previous year

What is the tax rebate for senior citizens

a senior citizen can claim deduction up to Rs. 50,000  

Who is a senior citizen for income tax purpose

who is 60 years or above in age but less than 80 years 

Which tax regime is better for senior citizens

Old one

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