Tax Exemption for Senior Citizens
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A senior citizen is an individual resident (man or woman) who is 60 years old or more but below 80 years as on the last day of the previous year (born on or after April 1st, 1935 and before April 1st, 1955). . According to a Central Board of Direct Taxes directive, cases of senior citizens cannot be scrutinised unless an assessment is necessary on the basis of credible information.Senior citizens’ source of income include pension, rental income, interest on savings, fixed deposits, senior citizen saving scheme, reverse mortgage and post office scheme
Union Budget announced on 1st February 2018 made the below changes to IT Act.
Senior persons aged between 60-80 years can claim tax deductions of up to Rs.50, 000 on health insurance and medical expenses under section 80D. To offer this tax benefit to aged people, the limit of deduction has been raised from Rs.30, 000 to Rs.50, 000 in the new budget. Due to the introduction of this new rule, each and every senior citizen of India can now take benefit of up to Rs.50,000 tax deduction every year for any general medical expenditure or health insurance premium.
The senior citizens are now allowed to claim a tax deduction of Rs.1 lakh for medical expenditure in case of specific critical illnesses. The earlier deduction limits of Rs.60,000 for senior citizens and Rs.80,000 for very senior citizens are increased to Rs.1 lakh by the government this fiscal to offer a better life to the aged people of India.
Apart from these, for the senior citizens, deduction of the interest income on deposits with banks and post offices is increased to Rs.50,000 from Rs.10,000 under Section 194A. No TDS is not required to be deducted on this type of income. Senior citizens are also able to take this benefit for interest income on their fixed deposit schemes and recurring deposit schemes.
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