Income Tax for Senior Citizens

Income Tax for Senior Citizens for FY 2020-21 & AY 2021-22 as per Old Regime 

New Income Tax Slab for Super Senior Citizens FY 2020-21 & AY 2021-22 

Income Tax for Super Senior Citizens for FY 2020-21 & AY 2021-22 as per Old Regime 

Income Tax Calculation for Senior Citizens

The process of tax calculation for senior citizens is like the method of tax calculation for individuals below 60 years.

Income tax for senior citizens or pensioners is levied on all sources of income such as pension, rental income, interest or earnings from savings schemes, fixed deposits, post office schemes or reverse mortgage. Apart from the standard deduction for senior citizens, tax deductions under Section 80C,  section 80D and 80DDB are also applicable.

Senior citizen income tax limit has been increased from Rs. 2.5 lakh to Rs. 3 lakh for a deduction.

During tax calculation for senior citizens, retirement benefits and gratuity must be excluded. You should also use an online calculator provided by the IT department to know income tax for senior citizens.

Enter the following details to know your approx. tax liability:

1. Assessment year for which you want to calculate income tax for senior citizens

2. Residential status, type of taxpayer

3. Income from salary

4. Income from house property if any

5. Capital gains & income from other sources

6. Profit or gains or any business or profession

7. Agricultural income if any

8. Standard deductions

9. Education cess as per your slab of income tax for senior citizens

10. Surcharge if applicable

11. Total tax liability

12. Due date of submission of ITR (income tax return)

13. Completion of assessment for ITR

14. TDS/TCS if applicable

After entering all such details as per your slab of income tax for senior citizens, you can click on ‘calculate’ to know approx. tax liability.

2. Tax exemption up to Rs 5 lakh for super senior citizens under the old system, whereas this limit has been 2.5 lakh under new tax regime for income tax for senior citizens

3. Standard deduction for senior citizens is Rs 50,000 is applicable for all

Senior Citizen Income Tax Limits and Benefit

1. Under Section 80D, income tax for senior citizens is deductible up to Rs 50,000 for payments towards health insurance premium

2. Income tax for senior citizens has an exemption limit of Rs 3 lakh under the old regime of tax slabs

3. Income tax calculation for senior citizens includes an exemption on interest earned up to Rs 50,000

4. Income tax for senior citizens above 80 years (i.e. Super Senior Citizens) can file ITR – Income Tax Return – through ITR Sahaj 1 form or ITR Sugam 4 form, whichever preferred either manually or digitally

5. Income tax for senior citizen pensioners are offered a standard deduction of Rs 50,000 onpension income earned in a year

6. Income tax for senior citizens allows deductions of up to Rs 1 lakh u/s 80DDB for treatment of critical illnesses

Exemptions and Deductions - Income Tax for Senior Citizens

1. Rebate u/s 87A is applicable under income tax for senior citizens if total income does not exceed Rs 5 lakh

2. Exemption of income tax for senior citizens includes payment of advanced tax, no deductions of TDS on earned interest

3. Health insurance premium deduction up to Rs 50,000 under income tax for senior citizens

4. U/s 80DDB, deduction of income tax for senior citizens include a higher deduction for specific ailments

5. Tax calculation for senior citizens excludes amount received under a reversed mortgage scheme

Deduction of Income Tax for Senior Citizens Under Union Budget 2020-21

1. Health Insurance

Deduction of income tax for senior citizensup to Rs 50,000 is granted in the financial year of 2020-21 for payment of health insurance premium or medical expenses. For dependent senior citizens, limits increase up to Rs 1 lakh that can be claimed under section 80DDB.

2. Pension

Standard deduction for senior citizens up to Rs 50,000 is levied for pensions earned.

Also Read: TDS on Salary

Frequently Asked Questions (FAQs) 

Q. I come under super senior category. My yearly earnings are less than Rs. 5 lakh without any rebate. Do I still have to file income tax for senior citizens?

A. No. You do not have to file income tax for senior citizens under FY 2019-20. However, you can still file income tax for senior citizens for FY 2020-21. If you opt for an old regime, it is not required.

Q. My parents are senior citizens and dependents. Can I claim any tax exemption for medical expenses incurred under income tax for senior citizens?

A. If your parents are under senior or super senior citizens category and your dependents, you can claim a deduction of up to Rs 50,000 under section 80D for medical expenses incurred.

Q. What are tax saving options under income tax for senior citizens?

A. Some of the prominent tax saving options under income tax for senior citizens are:

· Senior citizen savings scheme u/s 80C (tax deduction up to Rs 1.5 lakh)

· Interest income on deposits u/s 80TTB (tax deduction up to Rs 50,000)

· Deduction of income tax for senior citizens up to Rs 50,000 u/s 80D

· Deduction of income tax for senior citizens up to Rs 1 lakh u/s 80DDB

Under new regime announced in Union Budget 2020, income tax for senior citizens does not include exemptions mentioned above or deductions. Instead, it has a standard deduction for senior citizens.

Q. Can I claim a deduction of income tax for senior citizens for more than one insurance policy?

A. Yes. You can claim tax benefits under income tax for senior citizens for more than one insurance policy.

Q. Can NRI file claims under section 87A?

A. No. Minimum criteria to file income tax for senior citizens under section 87A is to be an Indian resident. Therefore, NRIs cannot claim rebate under section 87A.

Sources:

https://www.incometaxindia.gov.in/pages/tools/income-tax-calculator.aspx