Skip to main content

Tax Benefits Available for Senior Citizens

Best SIP Funds to Invest Online 


Articles Discusses Income Tax Benefits Available to Senior Citizens in India. A person becomes senior citizen under Income Tax Act in any year after attaining the age of 60 even for one day. Once he attains 60 years, his status as senior citizen in that financial year, gives him some relief. There are not many income tax exemptions available for senior citizens. These are listed below:

1. Higher Exemption Limit for Senior Citizens

From F.Y. 2011-12  Qualifying age for Senior Citizens has been reduced from 65 years to 60 years and from A.Y. 2015-16 exemption limit for Senior Citizens has been enhanced from Rs. 2,50,000 to Rs. 3,00,000.  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 are entitled to higher exemption Limit of Rs. 5,00,000 from A.Y. 2012-13.


Senior citizens and a very senior citizen are granted a higher exemption limit as compared to normal tax payers. Exemption limit is the quantum of income up to which a person is not liable to pay tax. The exemption limit granted to senior citizen and very senior citizen for the financial year 2017-18 is as follows :

Senior citizenVery senior citizen
A senior citizen is granted a higher exemption limit compared to non-senior citizens. The exemption limit for the financial year 2016-17 available to a resident senior citizen is Rs. 3,00,000. The exemption limit for non-senior citizen is Rs. 2,50,000. Thus, it can be observed that an additional benefit of Rs. 50,000 in the form of higher exemption limit is available to a resident senior citizen as compared to normal tax payers.
A very senior citizen is granted a higher exemption limit compared to others. The exemption limit for the financial year 2016-17 available to a resident very senior citizen is Rs. 5,00,000. The exemption limit for non-senior citizen is Rs. 2,50,000. Thus, it can be observed that an additional benefit of Rs. 2,50,000 in the form of higher exemption limit is available to a resident very senior citizen as compared to normal tax payers.


2. Reverse mortgage for senior citizens

Reverse mortgage' – a 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.  For more details read the following article :- Reverse mortgage created under a scheme made and notified by the Central Government shall not be regarded as a transfer U/s. 2(47)

3. Tax benefits on medical insurance hiked for Senior Citizens

A senior citizen can avail of higher of higher deduction of Rs 20,000 u/s Section 80D and the same limit is been further increased to Rs. 30,000/- from A.Y. 2016-17.

4.  Tax benefit in respect of Expense on medical expenditure in respect of a very senior citizen

With effect from A.Y. 2016-17 Any payment made on account of medical expenditure in respect of a very senior citizen, if no payment has been made to keep in force an insurance on the health of such person, as does not exceed thirty thousand rupees shall be allowed as deduction under section 80D. Section 80D- Hike in Deduction Limit for Mediclaim
5. Higher Deduction u/s 80DDB for Senior Citizens and Super Senior Citizens

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.

From A.Y. 2016-17 higher limit of deduction of upto eighty thousand rupees is allowable, for the expenditure incurred in respect of the medical treatment of a "very senior citizen". A "very senior citizen" is proposed to be defined as an individual resident in India who is of the age of eighty years or more at any time during the relevant previous year.   Section 80DDB– Limit raised & waived condition of certificate

6. No Routine Income Tax Scrutiny of Senior Citizens for FY 2011-12 -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.

7. Senior Citizens not having Business Income Exempt From Advance tax payment :- As per section 208 From Financial year 2012-13  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.

8.  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.

9.  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.

10. Exemption from e-filing of income tax return to very senior citizen

​​From the assessment year 2017-18 onwards any taxpayer filing return of income in Form ITR 1/4 and having a refund claim in the return or having total income of more than Rs. 5,00,000 is required to furnish the return of income electronically with or without digital signature or by using electronic verification code. However, Income-tax Law grants relaxation from e-filing in above case to very senior citizen.

In other words, a very senior citizen filing his return of income in Form ITR 1/4 and having total income of more than Rs. 5,00,000 or having a refund claim can file his return of income in paper mode, i.e., for him e filing of ITR 1/4 (as the case may be) is not mandatory. However, he may go for e-filing if he wishes.​

Some Frequently Asked Question on Attaining the Age of Senior Citizen or Super Senior Citizen in a Particular Assessment Year with Practical Examples-

  • At what age a person will qualify as a senior citizen and very senior citizen under the Income-tax Law?

    Before understanding the age criteria, it is very important to know that the tax benefits offered under the Income-tax Law to a senior citizen/very senior citizen are available only to resident senior citizen and resident very senior citizens. In other words, these benefits are not available to a non-residenteven though he may be of higher age. The age and other criteria to qualify as a senior citizen and very senior citizen under the Income-tax Laware as follows :

    Criteria for senior citizenCriteria for very senior citizen
    Must be of the age of 60 years or above but less than 80 year at any time during the respective year.Must be of the age of 80 years or above at any time during the respective year.
    Must be residentMust be resident
    IllustrationIllustration

    (1) Mr. Kumar (resident in India) attained the age of 60 years during the financial year 2017-18. Will he qualify as senior citizen under the Income-tax Law for the financial year 2017-18?

    **

    Yes, since Mr. Kumar is a resident and he attained the age of 60 years during the year 2017-18, he will be treated as senior citizen under the Income-tax Law for the financial year 2017-18.

    (2) Mr. Kamal (non-resident) attained the age of 60 years during the financial year 2017-18. Will he qualify as senior citizen under the Income-tax Law for the financial year 2017-18?

    **

    Mr. Kamal is a non-resident, the benefits of senior citizen under the Income-tax Law are available to a resident only, and hence, Mr. Kamal will not be treated as senior citizen under the Income-tax Law for the financial year 2017-18.

    (1) Mr. Raja (resident in India) attained the age of 80 years during the financial year 2017-18. Will he qualify as very senior citizen under the Income-tax Law for the financial year 2017-18?

    **

    Yes, since Mr. Raja is a resident and he attained the age of 80 years during the year 2017-18, he will be treated as a very senior citizen under the Income-tax Law for the financial year 2017-18.

    (2) Mr.Rajat (non-resident in India) attained the age of 80 years during the financial year 2017-18. Will he qualify as very senior citizen under the Income-tax Law for the financial year 2017-18?

    **

    Mr.Rajat is a non-resident, the benefits of very senior citizen under the Income-tax Law are available to a resident only and, hence, Mr.Rajat will not be treated as very senior citizen under the Income-tax Law for the financial year2017-18.


SIPs are Best Investments when Stock Market is high volatile. Invest in Best Mutual Fund SIPs and get good returns over a period of time. Know Top SIP Funds to Invest Save Tax Get Rich

For further information on Top SIP Mutual Funds contact Save Tax Get Rich on 94 8300 8300

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com

Popular posts from this blog

ICICI Pru Mutual Fund Dividend

ICICI Prudential Mutual Fund has announced dividend under the following schemes: Scheme Dividend ( Rs /unit) ICICI Pru Capital Protection Oriented Ser V Plan B-D 0.03611325 ICICI Pru Capital Protection Oriented Ser V Plan B Direct-D 0.03611325 ICICI Pru Balanced Advantage Direct-DM 0.06 The record date has been fixed as February 08, 2017. ------------------------------ ------ Invest Rs 1,50,000 and Save Tax upto Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds Top 4 Tax Saver Mutual Funds for 2017 - 2018 Best 4 ELSS Mutual Funds to invest in India for 2017 1. DSP BlackRock Tax Saver Fund 2. Invesco India Tax Plan 3. Tata India Tax Savings Fund 4. BNP Paribas Long Term Equity Fund Invest in Best Performing 2017 Tax Saver Mutual Funds Online Invest Best Tax Saver Mutual Funds Online Download Top Tax Saver Mutual Funds  Application Forms For further information contact  SaveTaxGetRich on 94 8300 8300 ------------------------------ ------ Leave y...

Hidden Bank Fees

  What Banks Hide From Customers Imagine after a peaceful and exciting holiday you receive your bank statement with steep charges. You then rush to your bank and start confronting staff members and to your dismay, you come to know that the high end debit card was charged very heavily. Wouldn't this cause damage to your finances? So remember, the world outside is full of deceptive and double cheating people. Unethical practices are always used by company sales person in order to meet the target. Credit card companies, mutual funds and bank institutions always play dirty tricks to lure customers and the practices are rampant. So here's how you should be careful while dealing with your banks: High End Debit Card Charges While opening an account with a bank you opt for a debit card with minimal charges. But later on when you upgrade your card and opt for high end debit card the annual charge rise by a good amount. Though such a card has slew of features but it all comes at a high ...

Partial withdrawal from PPF

  Public Provident Fund (PPF) account has a lock in period   If you opened a PPF account to meet your retirement needs,, think twice about withdrawing from this fund before retirement. But provided it's an emergency here are the rules. Public Provident Fund (PPF) account has a lock in period before which you cannot withdraw your money.   The partial withdrawal is allowed after the completion of 6 financial years . This means that you will be allowed a partial withdrawal from 1 April 2017. The maximum partial withdrawal allowed is the least of the following: 50 percent of the account balance at the end of fourth financial year, 31 March 15 50 percent of the account balance of the end of previous financial year, 31 March 17.   There's a loan option available on your PPF account between the fourth and the sixth financial year. You can obtain a loan of up to 25 per cent of the balance in your account. However, this will attract interest of 2 percent more than the prevailing ...

Updating a minor PAN card upon becoming adults

  Updating a minor's PAN card once they become adults A PAN card issued in the name of a minor does not contain the minor's photograph or signature, and therefore, cannot be used as a valid proof of identity. Once a minor PAN card holder turns 18, the relevant changes must be made in the PAN records. A new card is then issued bearing a photograph and signature. Application The applicant is required to fill up the "Request for new PAN card andor changes or correction in PAN data" form. The form can be filled up online by accessing NSDL's Tax Information Network website and clicking on the online PAN application tab. Information The applicant must mention the existing PAN number in the application and check the `photo mismatch' and `signature mismatch' boxes, and submit the online form. The form must also be printed out, signed by the applicant, and submitted along with two photographs. Documents Identity and address proof in the form of a copy of the app...

Perpetual SIP - Its Advantages

Retail investors have taken a fancy to investing in mutual funds through systematic investment plans (SIPs). As per industry estimates, Rs 4,000 crore flows into SIPs every month. One way to take advantage of SIPs in a true long-term manner is to opt for a perpetual SIP 1. What is a perpetual SIP? In an SIP , you make periodic investments in a mutual fund scheme of your choice generally every month for a pre defined tenure. While signing up an SIP mandate , you have the option to leave the end-date column blank. If the column is blank, it means the investor has opted for a perpetual SIP . Most fund houses assume this SIP will continue till December 2099 unless you give a written communication to stop it. However, some fund houses require you to tick the `perpetual option'. 2. What are the advantages of perpetual SIPs? Registering an SIP involves a lot of paperwork and it takes time. It is observed that many investors skip their SIP instalments when they go for short-tenure option...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now