In India, senior citizens are eligible for numerous income tax benefits. Indian citizens 60 years of age and older are eligible for income tax benefits such as the standard deduction, advance tax payment, deductions for medical insurance premiums, interest from bank and post office deposits, and more.
To recall, the exemption limit under the previous tax system was Rs. 3 lakh for senior citizens and Rs. 5 lakh for super senior citizens (80 years of age and older). However, there is no specific exemption threshold for senior or super senior citizens under the new tax system. Both receive the same basic exemption of 2.5 lakhs as an ordinary taxpayer.
ITR filing: What Are The Exemptions and Deductions that Senior Citizens Can Claim?
- In the new tax regime, there is no separate exemption limit for senior or super-senior citizens.
- According to Section 80D of the Income Tax Act, one can avail of tax benefits against the cost incurred to purchase health or critical illness insurance.
- The maximum deduction allowed under this section is Rs 25,000 for self, spouse, and dependent children.
- However, if one or both parents are above 60 years of age or senior citizens, the maximum tax deduction allowed is Rs. 50,000.
Who is a Senior Citizen?
A resident Indian who is 60 years of age or older is considered a senior citizen. Only residents of the country can avail of these special benefits.
What is Section 80D?
Every individual or HUF can claim a deduction from their total income for medical insurance premiums paid in any given year under Section 80D. This deduction is also available for top-up health plans and critical illness plans.
The deduction benefit is available not only for a health insurance plan for self but also premium paid for the policy to cover a spouse, dependent children or parents.