In India retirement age is above 60 years in many of the statutory and compliance documents. And the people who have crossed this age are called senior citizens under Indian statue. A Senior citizen might not have a great advantage in physical sense due to their growing age. But, under Indian tax regime it’s like boom of benefits. Let me take you through the list of tax benefits and you tell me if this sounds great!
Of course, senior citizens of our country should get more privileges. In fact, these tax benefits give a sigh of relief to them at least to some extent.
Before initiating a discussion on the tax benefits to senior citizens. Let’s know the income tax slab rates for senior citizens in India.
Income Tax Slab for Senior Citizens in India: FY 2018-19
For Senior Citizens ( Individual Resident who is of the age of 60 years and above but below the age of 80 years )
| INCOME SLABS FY 2019-20 | TAX RATES |
|---|---|
| Taxable Income | NIL |
| Taxable Income > Rs.300000 but | 5% of Amount by which Taxable Income > Rs.300000 |
| Taxable Income > Rs.500000 but | Rs.10000 + 20% of amount by which Taxable Income > Rs.500000 |
| Taxable Income > Rs.1000000 | Rs.110000 + 30% of amount by which Taxable Income > Rs.1000000 |
Income Tax Slab for Super Senior Citizens in India: FY 2018-19
For Super Senior Citizens ( Individual Resident who is of the age of 80 years and above )
| INCOME SLABS FY 2019-20 | TAX RATES |
|---|---|
| Taxable Income | NIL |
| Taxable Income > Rs.500000 but | 20% of amount by which Taxable Income > Rs.500000 |
| Taxable Income > Rs.1000000 | Rs.100000 + 30% of amount by which Taxable Income > Rs.1000000 |
Tax Benefits to Senior Citizens in India
Income Tax Slab & Advance Tax
As shown in above, senior citizens get a higher tax exemption. And, that’s really good! Being a normal Indian citizen we pay taxes in case our annual income exceeds Rs.2.5 lakhs. But, a senior citizen (i.e. individual who have crossed 60 years) has a differential tax slab bracket.
Here’s a table for your better understanding:
| Individual Tax slab | Tax- free Limit |
|---|---|
| Normal Citizen (Less than 60 Yrs.) | Income exempt upto Rs.250,000 |
| Senior Citizen (60 Yrs. to 80 Yrs.) | Income exempt upto Rs.300,000 |
| Super Senior Citizen (Above 80 Yrs.) | Income exempt upto to Rs.500,000 |
Thus all in all, senior citizens get Rs.50,000 extra benefit or even a double benefit under income tax regime.
Note: Also they are exempt from advance tax regime. Advance tax is tax break-up and payment schedule spread through the quarterly payment to achieve 100% by year end (31st March). This benefit simply means that, they don’t have any compulsion to meet quarterly due date and tax amount percentage.
They can simply pay complete tax on or before 31st March to be compliant. This is huge relief as they are safe-guarded from interest and penalty for missing any or all of these due dates. Isn’t that great!
Tax Deductions for Senior Citizens:
1. Medical Benefits under Section 80D
In today’s time we understand and feel the pitch of increasing burden of medical expenses. So, the senior citizens can claim higher benefit of these medical expenses. To explain in details let me walk you all through a few section in details.
Section 80D
Section 80D provides benefit to individual for paying medical insurance premium. The below tables explains the tax benefit difference between the two age groups.
| Age Group | Benefits |
|---|---|
| Normal Citizen (Less than 60 Yrs.) | Rs.25000 or actual expenses whichever is less |
| Senior Citizen (Above 60 Yrs.) | Rs.50000 or actual expenses whichever is less |
We are talking about an enhanced double benefit over and above normal citizen limit.
Note: Also, in case of super senior citizen (i.e. individual who has crossed 80 years) and who doesn’t have any medical insurance in his or her name, they can claim medical expense and bill payment under this section up to a limit of Rs.50,000. This is a huge tax benefit which a regular citizen cannot avail.
Section 80DDB
Section 80DDB provides benefit of tax deduction on medical treatment and expense for specified diseases. The below tables explains the tax benefit difference between the two age groups:
| Age Group | Benefits |
|---|---|
| Normal Citizen (Less than 60 Yrs.) | Rs.40000 or actual expenses whichever is less |
| Senior Citizen (Above 60 Yrs.) | Rs.100000 or actual expenses whichever is less |
The benefit available for such claim under 80DDB much more than that of what a regular individual gets.
2. Interest Income Deductions under Section 80TTB
Where regular individuals enjoy benefit of Rs.10000 exemption under section 80TTA for any interest income earned from bank or postal deposit on saving schemes. There was a new section introduced for senior citizens (80TTB) wherein any interest income earned by senior citizen is exempt up to Rs.50,000.
Unlike 80TTA which is only available for claim of saving deposit interest, 80TTB allows to claim interest income from any source i.e. fixed or saving deposit in bank or post office or co-operative organization.
Thus, a senior citizen not only gets more than 5 times the normal benefit earned and availed under this section, the scope of claim is also broadened.
Also note: If the individual is claiming 80TTB, the same person cannot claim section 80TTA.
There is also an option wherein individual can apply for Form 15H for exemption from any interest earned from fixed deposit. You need to specify that your annual income doesn’t exceed Rs.3 lac or Rs.5 Lac as the case may be.
Tax Benefits to Senior Citizens: The Bottom Line
To conclude, these are the major tax benefits wherein a senior citizen saves almost double the taxes than a normal citizen. Now, don’t even get me started on the various schemes which are available for them to avail additional benefit to income tax and increase their income. They are like:
- Withdrawal under Provident Fund, National Pension scheme and Pension scheme which are now tax free.
- Various other schemes wherein amount can be invested and the benefit can be claimed under 80C like: Senior Citizen saving scheme, many schemes as provided by post offices.
Every time I read about the above benefits I envy the huge difference in benefits between the two age groups. But, I also feel happy looking at the plethora of tax benefits being provided to our deserving and respectable senior citizens. What is your opinion on the same? Do share your thoughts in the comments section.
View Comments (2)
Is this 80TTB benefit available for senior NRIs also or is it for residents only?
Section 80TTB benefit is given to resident senior citizens only. So, one needs to check the residential status and see if a particular deduction can be claimed. NRIs can claim tax deduction U/s 80TTA but that is upto Rs.10000 only.