Filling the income tax returns form a very crucial part in the life of every taxpayer. This particular step not only makes every individual a responsible citizen but also allows the government to serve the general public through the funds received.
While the new tax system and budget might be appealing to a lot of people, senior citizens, on the other hand, can also enjoy various tax benefits compared to those who fall below the age bar of 60 years.
Financial To Do’s for Senior Citizens Across the Country
The budget of 2020 has much good news for the senior and elderly citizens who fall under the age bracket of 60-80 years. Government took this essential step to stabilize the falling rates of interests, cost of living, and expenses in the medical sector.
Provisions that introduced by Government of India are :
- Allocating a sum of Rs 9,000 crores for the welfare of the senior citizens.
- Increasing the bank deposit insurance coverage from 1 lakh to 5 lakh.
- Income tax benefits provided under section (u/s) 80C, 80D, 80DDB of the Income Tax Act.
Step by Step Guide to the Tax Benefits Under the Income Tax Act
- Exemption Limit: The basic tax exemption limit for the individuals below 60 years is 2.5 lakh in a financial year; however,for senior citizens, the bar is raised higher. Every senior citizen can enjoy tax exemption till Rs 3 lakh and elderly citizens can enjoy tax exemption till Rs 5 lakh. That means all the senior and elderly citizens are not required to file the income tax or get TDS deducted during the financial year if their annual income is between 3 lakh and 5 lakh, respectively.
- Deduction u/s 80D: For all those senior and elderly citizens who don’t have medical insurance coverage, the deduction limit u/s 80D act of Income Tax is Rs 50,000 in a fiscal. The overall expenditures allowed on the preventive health check-ups come around Rs 5,000.
- Deduction u/s 80DDB: An individual who is below the age of 60 years can claim a deduction of Rs 40,000 in a financial year under Income Tax Act 80DDB. The expenditures that come under the Income Tax Act are medical treatments of specified diseases or ailments of self or dependent people. Senior citizens of the country get a claim of up to Rs 1 lakh under the same scheme.
- Interest Income Deduction: People below the age of 60 may claim a deduction up to Rs 10,000 on interests, bank savings account u/s 80 TTA. However, senior citizens can claim a deduction of Rs 50,000 on both bank and post office deposits u/s 80 TTB.
- Advance Tax: Senior and elderly citizens do not have to pay any advance tax unless they are liable to an income under the “Profits and Gains For Business or Profession”. Other citizens of the country are required to pay a sum of Rs 10,000 or more advance tax.
- ITR Filing: Official ITR filing of ITR-1 (Sahaj) or ITR-4 (Sugam) is not mandatory for senior citizens, and they can file the income tax return both online and offline.
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