Income Tax For Senior Citizens : Benefits Available For FY 23-24?

Who are called Senior Citizens?

Senior citizens are individuals who are 60 years of age or more but less than 80 years during the financial year.

Those who are 80 years or more are classified as super senior citizens.

Budget 2024 Update

• Under new tax regime, standard deduction increased from Rs 50,000 to Rs 75,000.
• Exemption limit for family pension increased from Rs 15,000 to Rs 25,000.
• Exemption limit for LTCG has been raised from Rs 1,00,000 to Rs 1,25,000.

What are the basic exemption limit?

Under the old tax regime

• Senior citizens (60 years and older but less than 80 years): Income up to Rs 3 lakh is exempt from tax.
• Super senior citizens (80 years and older): Income up to Rs 5 lakh is exempt from tax.

Under the new tax regime

For both senior citizens and super senior citizens: Income up to Rs 3 lakh is exempt from tax.

Click here to know about Income Tax Calculation for Senior Citizens.

Benefits on saving or FD interest income

Senior citizens can claim a deduction of up to Rs 50,000 on interest income from savings accounts and fixed deposits (FDs) under Section 80TTB. This benefit is not available under the new tax regime.

No TDS deduction u/s 194A for FD interest income

• If income from FD interest is upto 50,000 in the financial year then no TDS is deducted u/s 194A.
• If FD interest income is more than 50,000 than TDS @ 10% will be applicable.

TDS Exemption for Senior Citizens if the amount is more than 50,000

• Senior and super senior citizens can avoid TDS on interest income by submitting Form 15H which is a declaration under Section 197A(1C) of the Income Tax Act.
• It is applicable if interest income exceeds Rs 50,000 but total income is still below the taxable threshold.

Medical Insurance u/s 80D

• Senior citizens can claim up to Rs 50,000 as a deduction for health insurance premiums paid for self, spouse, and dependent children.
• An Additional deduction of Rs 50,000 if health insurance premiums are paid for parents who are also senior citizens.

Conditions for claiming deductions if the individual doesn’t have health insurance policy

Senior citizens can still claim deductions up to Rs 50,000 for medical expenses even if they do not have a health insurance policy. They should have Medical bills or medical expenditure which must be paid through credit/debit card, UPI, bank transfers, etc.

Higher deduction on specified diseases u/s 80DDB

Individuals and HUFs to claim deductions u/s section 80DDB for medical expenses incurred on specified diseases. The limit is Rs 40,000 for individuals and Rs 1,00,000 for senior and super senior citizens.

Tax Rebate Benefits for Senior Citizens

Senior citizens can avail a tax rebate under Section 87A.

• Under the Old Tax Regime: Available for total income up to Rs 5 lakh.
• Under the New Tax Regime: Available for total income up to Rs 7 lakh.

No Liability to pay advance tax

As per income tax law, advance tax are required to be paid on or before 31st March if the outstanding tax liability is Rs 10,000 or more. However, senior citizens without business income are exempt from paying advance tax.

Non Requirement of filing ITR

Section 194P exempts senior citizens aged 75 and above from filing income tax returns if they meet these conditions:

• Age 75 years or above.
• Resident in India.
• Receive pension and interest income only from the same specified bank.
• Submit a declaration in Form 12BBA to the specified bank.
• The specified bank deducts TDS considering deductions and rebates, and seniors need not file ITR after this TDS deduction.

To know about 80TTA Deduction Click Here

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