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What Tax Benefits are Available to the Senior Citizens in India?
August 10, 2017
Individuals of all ages are entitled to certain tax benefits in the country. However, senior citizens get to enjoy numerous such benefits for a comfortable retirement.
Before we get to the various tax benefits available to the senior citizens, it’s important to have a clear understanding of the term “senior citizen” first.
Who is a Senior Citizen?
According to the Income Tax Act, a senior citizen is a person who has attained an age of 60 years during a fiscal year. So, if a person was born on 17th April 1956 they will become 60 years old during the fiscal year 2016-17 and thus are eligible for all the tax benefits available to the senior citizens then onwards.
The following are some of the major tax benefits available to the senior citizens in India:
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High Exemption Limit
The income tax exemption limit for senior citizens is Rs. 3 lakhs while the same for other citizens is 2.5 lakhs. In other words, senior citizens get an additional benefit of Rs. 50,000 in the form of higher exemption limit. However, super senior citizens, i.e. citizens of age 80 or above can enjoy an even higher exemption limit of Rs. 5 lakhs.
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Reverse Mortgage Tax Benefit
A senior citizen can choose to receive periodic payments from a lender through a Reverse Mortgage Loan (RML). In this, they can mortgage their house while remaining the owner. However, the amount earned from this is not considered as an income which is why they don’t have to pay any tax on it.
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Medical Treatment Deductions
As per Section 80DDB, senior citizens can claim a tax deduction up to Rs. 60,000 for expenses regarding certain diseases such as malignant cancers, neurological diseases which result in a disability of 40% or above, AIDS, etc.
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Health Insurance Tax Benefit
Senior citizens can claim up to Rs. 30,000 in aggregate for the premiums paid under insurance policies as tax benefits.
Note: The tax deduction limits can change from time to time. So, make sure you verify the limits and provisions before making any tax benefits claims.
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