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Seven Unique Income Tax Incentives For Senior Citizens
Senior citizens are eligible for a number of tax advantages. Along with tax advantages, the income tax e-filing process has been simplified especially for them. Let’s examine the income tax benefits accessible to seniors.
Various tax slab rates
Senior citizens pay different income tax slab rates than non-senior citizens do.
Up to $50,000 in interest income is excluded.
CA According to Amit Gupta, MD, SAG Infotech, Section 80TTB went into effect in FY 2018–19 and enables a deduction for interest up to $50,000. The Slab Rates specifically created for Senior Citizens will be applied on any earnings over 50,000. It is crucial to remember that in these circumstances, the 10,000 deduction allowed by section 80TTA for interest on savings account will not apply.
Medical insurance premium payments are deductible under section 80D.
Medical insurance premium payments are eligible for a deduction under Section 80D of up to $25,000 for non-senior citizens and up to $50,000 for seniors. The cap was previously $30,000, however it was raised to $50,000 in the 2018 Budget. In addition, section 80D permits deductions for both actual medical expenses paid by extremely senior individuals and the payment of medical insurance premiums, according to Gaurav Kapoor, director and co-founder of Fincorpit Consulting.
Non-deduction of TDS on interest
A senior citizen may submit Form 15H for non-deduction of TDS on interest on fixed deposits if his or her entire income is free from income tax and there is no tax due by him or her for that fiscal year.
According to Amit Gupta, the budget 2018 revisions further upped the threshold for older persons’ tax deductions under section 194A from 10,000 to 50,000.
Increased section 80DDB deduction for certain illnesses
Taxpayers are given tax relief under Section 80DDB while paying for the medical care of certain disorders. Prior to Budget 2018, seniors were permitted to deduct 60,000 but now can deduct 120,000.
There is no need to pay the advance tax.
Seniors who don’t have any company income are exempt from advance tax payments and just have to pay self-assessment tax on their overall income.
There is no tax due on the amount received through a reverse mortgage.
With the reverse mortgage plan, senior citizens get recurring payments by permanently mortgaging their homes while maintaining ownership and possession. According to this plan, after the borrower dies, the loan is returned with accrued interest through the sale of the property, and the remaining money is given to the borrower’s legal heirs. The sum provided to seniors in instalments under this plan is entirely exempt from income tax.