Senior citizens and super senior citizens get many such exemptions, which are not available to common taxpayers. In the Income Tax Act, a senior citizen is considered to be a person whose age is 60 years or more. But, less than 80 years. People of 80 years and above are called super senior citizens. Let us know what kind of benefits senior citizens and super senior citizens get under the Income Tax Act.

Difference in Basic Exemption Limit

The benefits available to senior citizens and super senior citizens for the financial year 2023-24 are mostly the same. There is a slight difference only in the case of basic exemption limit. The basic exemption limit for senior citizens is Rs 3,00,000. This means that if the annual income of a person of 60 years or more (less than 80) is up to Rs 3 lakh, then he does not need to pay any kind of tax.

Attention to medical expenses of older people

The basic exemption limit for super senior citizens is Rs 5,00,000. This means that if a person is 80 years or more, then he will not have to pay any tax on income up to Rs 5 lakh annually. This has been done keeping in mind that the medical expenses of a person increase with age. He also has to use more medicines regularly.

How much tax is levied on whom?

If the annual income of senior citizens is between Rs 3,00,001 to Rs 5,00,000, then it is necessary to pay 5% tax. If the income is Rs 5,00,0001 to Rs 10,00,000, he has to pay 20% tax on income above Rs 10,000 plus Rs 5 lakh. If the annual income is Rs 10,00,000, he has to pay 30% tax on income above Rs 1,10,000 plus Rs 10 lakh.

Super senior citizens do not have to pay tax on income up to Rs 5 lakh annually. The tax rate on income between Rs 5,00,001 to Rs 10,00,000 will be 20 per cent. If you have an annual income of more than Rs 10,00,000, you will have to pay 30% tax on the amount above Rs 1,00,000 plus Rs 10 lakh.

Senior citizens and super senior citizens are allowed a deduction of Rs 50,000 annually on health insurance premium under section 80D of the Income Tax Act. Apart from this, he is allowed a deduction of Rs 50,000 in the case of interest income from savings accounts and deposits under section 80TTB.

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The government is likely to increase the annual basic exemption limit from the current Rs 2.5 lakh to Rs 5 lakh under both the old and the new tax regime in the coming budget. The current annual basic exemption limit of Rs 2.5 lakh (under both old and new tax regime) for tax payers below 60 years of age remains the same from FY 2014-15. This limit may be reconsidered considering several factors like rise in cost of living, inflation, number of taxpayers required to file income tax returns, tax revenue foregone by the government etc.

From the financial year 2014-15, the deduction limit under section 80C of the Income Tax Act, 1961 (Act) has been capped at Rs 1.5 lakh. Most of the deductions under Section 80C encourage taxpayers to invest in long-term savings such as Public Provident Fund (PPF), National Pension System (NPS) and fixed deposits which provide long-term finance for infrastructure projects in the country. does. Apart from this, the taxpayer spends the amount required to repay the home loan, insurance for self and dependents and children’s education. Therefore, it is an expectation that the deduction limit may be increased from Rs.1.5 lakh to Rs.3 lakh.

Tax-free medical reimbursement and traveling allowance exemption was withdrawn by applying standard deduction from the financial year 2018-19. Since then, while the amount of the deduction has remained constant, medical expenses and fuel costs have increased. Thus, there is a mater to consider increasing the standard deduction from the existing limit of Rs.50,000 to Rs.1 lakh.

Currently, the deduction limit for health insurance premium is Rs 25,000, including checkup for self, spouse and children, and Rs 50,000 for parents of whom at least one is a senior citizen. Considering that there has been an increase in the cost of hospitalization and medical expenses, these limits may be raised to Rs.50,000 and Rs.1 lakh respectively.

Child Education Allowance is currently exempt to the extent of Rs 100 and Rs 300 per child per month (up to a maximum of two children) for children’s education and hostel expenses respectively. This amount of exemption was fixed about two decades ago. Therefore, in view of the increase in the cost of education in recent times, there is a possibility of capping these exemptions to at least Rs 1,000 and Rs 3,000 per child per month respectively.

The deduction for interest on home loan is currently Rs 2 lakh. With interest rates rising and the deduction available for housing interest being capped at Rs 2 lakh, home loan buyers face a challenge in terms of non-tax deductible interest expense. Keeping the same in mind, this deduction can be increased from the existing limit of Rs 2 lakh to Rs 5 lakh. Also, this deduction (interest on home loan on own property) is not allowed under the new tax regime. Given that buying a home is a long-term financial commitment, it can also be assessed for providing this deduction under the new tax regime.

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