Senior citizens in India are eligible for a higher basic exemption limit compared to individuals below the age of 60. The basic exemption limit for older citizens as of the current tax year is Rs. 3 lakh. This means that individuals aged 60 or above can earn up to Rs. 3 lakh of income without being liable to pay income tax.
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No Advance Tax Liability
Senior citizens who do not have any business income are exempt from paying advance tax. Advance tax is the payment of taxes in installments throughout the year, which is typically required for individuals with significant income. Senior citizens who are not engaged in business activities can pay their tax liability at the time of filing their tax returns.
Deductions and Exemptions
- Medical Insurance Premium: Senior citizens can claim a deduction for medical insurance premiums paid for themselves or their dependents under Section 80D.
- Medical Treatment: Deductions can be claimed for medical treatment expenses incurred for specified diseases or ailments under Section 80DDB.
- Interest Income: Senior citizens can claim a deduction of up to Rs. 50,000 on interest income from deposits with banks and post offices under Section 80TTB.
Read more about deductions and exemptions.
Relief for Senior Pensioners
As of the current tax year, a standard deduction of Rs. 75,000 is available for pensioners.
- Senior Citizens' Savings Scheme (SCSS): SCSS provides a safe investment avenue for senior citizens with attractive interest rates and tax benefits under Section 80C.
- Tax-Saving Fixed Deposits: Senior citizens can invest in tax-saving fixed deposits offered by banks, which offer tax benefits under Section 80C.
Senior citizens enjoy higher basic exemption limits, additional deductions, exemptions, and special relief for pensioners. Remember, being knowledgeable about tax rules is an important step towards financial literacy and responsible tax management.
Look up more articles here for a smooth first time tax-filing process. All the best!
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