TAX ADVANTAGE AFTER SIXTY….

TAX ADVANTAGE AFTER SIXTY….

Everyone in this world willing to retain the younger phase of life but with or without our intention one day we are thrown-out from the Green Chamber to Grey Chamber. Income Tax Act recognizing a person as Senior Citizen who attains the age of 60 years and extending certain soft hand to exhaust the remaining part.

Higher Exemption from Taxable Amount

From F.Y. 2011-12 Qualifying age for Senior Citizens has been reduced from 65 years to 60 years and exemption limit for Senior Citizens has been enhanced from Rs. 2,40,000 to Rs. 2,50,000.  A new category of Very Senior Citizens, 80 years and above, has been created who will be eligible for a higher exemption limit of Rs. 5, 00,000. Senior citizen above the age of 80 years is entitled to higher exemption Limit of Rs. 5, 00,000 from A.Y. 2012-13.

Higher Deduction on Medical Insurance u/s 80D

A senior citizen can avail of higher of higher deduction of Rs 20,000 u/s Section 80D.

 Higher Deduction on Medical Treatment u/s 80DDB

Section 80DDB provides deduction to an assessee in case of expense on medical treatment of specified ailments. Generally this deduction is available upto Rs 40,000. However, if the patient is a senior citizen, then deduction of Rs 60,000 is allowable.

No Routine Income Tax Scrutiny : Big Relief…

Appreciating the concern of these taxpayers and with a view to mitigate their hardships, Central Board of Direct Taxes has reviewed its scrutiny selection procedure. In order to redress the grievance, it has been decided that during the financial year 2011-12, cases of senior citizens and small taxpayers, filing income-tax returns in ITR-1 and ITR-2 will be subjected to scrutiny only where the Income Tax department is in possession of credible information. Senior citizens for this purpose would be individual taxpayers who are 60 years of age or more.

Higher Rate of Interest deductible u/s 80 C

Senior citizens receive a higher interest (up to 50 bps) on a 5-year fixed deposit, which is eligible for deduction from the total income under Section 80C.

Exemption from TDS

Senior citizens can claim exemption on the tax deducted at source (TDS) on interest income earned on deposits. It can be done by submitting Form 15H under Section 197 of the IT Act.

Reverse mortgage for senior citizens

Reverse mortgage u/s2(47): Concept introduced by Finance 2007 -provides that a senior citizen will be able to avail of monthly income streams by mortgaging a house owned by him. 

Exemption from Remittance of Advance tax:

 Senior Citizens not having Business Income Exempt From Advance tax payment – Resident senior citizen, not having any income chargeable under the head “Profits and gains of business or profession”, shall not be liable to pay advance tax and such senior citizen shall be allowed to discharge his tax liability (other than TDS) by payment of self assessment tax.