Any individual having annual income over the tax-free limit or having received any income on which tax was deducted at source (TDS) needs to file his/her Income Tax Return (ITR). However, Senior Citizens between 60 and 80 years of age and Very Senior Citizens above the age of 80 years enjoy additional tax benefits compared to those available to individuals below the age of 60 years.
Here are some of the additional tax benefits available to Senior and Very Senior Citizens:
The basic tax exemption limit for normal citizens below 60 years of age is Rs 2.5 lakh in a financial year. But for Senior Citizens, the exemption limit is Rs 3 lakh, while for Very Senior Citizens, the limit is Rs 5 lakh.
So, a Senior Citizen doesn’t have to pay any tax or file ITR in case the annual income is up to Rs 3 lakh and no TDS is deducted during the financial year. Similarly, a Very Senior Citizen is exempted from paying tax and filing ITR if his/her annual income is up to Rs 5 lakh and no TDS is deducted.
Deduction u/s 80D
For Senior Citizens and Very Senior Citizens, the deduction limit u/s 80C of the Income Tax Act on payment of health insurance premium is Rs 50,000 in a financial year, while the deduction available to other citizens is Rs 25,000.
Expenditures on preventive health checkups up to Rs 5,000 are also allowed as deduction within the overall limits of Rs 25,000 for normal citizens and Rs 50,000 for Senior and Very Senior Citizens.
The overall deduction limits of Rs 25,000 and Rs 50,000 are also available to normal citizens and Senior/Very Senior Citizens respectively on medical expenditures to those, who don’t have health insurance covers.
Deduction u/s 80DDB
An individual up to 60 years of age may claim deduction up to Rs 40,000 in a financial year u/s 80DDB on expenditures made on medical treatment of specified diseases or ailments of self or dependent relatives of below 60 years of age, while the limit is Rs 1 lakh for Senior Citizens and Very Senior Citizens.
Deduction on Interest Income
While an individual below 60 years of age may claim deduction up to Rs 10,000 on interest on Savings Bank Account(s) u/s 80TTA, Senior Citizens and Very Senior Citizens may claim deduction up to Rs 50,000 on interest on Savings Bank Account(s) as well as on bank/Post Office deposits u/s 80TTB.
Senior and Very Senior Citizens don’t have to pay any advance tax unless they have income under the head ‘Profits and Gains from Business or Profession’, while individuals below 60 years of age need to pay advance tax if the estimated tax payable in a financial year is Rs 10,000 or more.
Offline ITR Filing
E-filings of ITR-1 (Sahaj) and ITR-4 (Sugam) are not mandatory for Very Senior Citizens and they may file their return of income either Online or Offline, while no other assessee can file Offline Return.