Under the Old Income Tax Regime, senior citizens, having income from salary, rent and interest income, enjoy additional tax benefits and rebates compared to younger taxpayers.
Under the Old Income Tax Regime, elderly persons enjoy additional tax benefits and rebates compared to younger taxpayers. However, under the New Income Tax Regime introduced in Budget 2020, there is no classification of individuals on the basis of age.
So, there are various sections under the Old Income Tax Regime that provide benefits and rebates to Senior Citizens.
Some of the tax benefits and rebates available to senior citizens are –
Taxable Income Slab
The taxable income slab for senior citizens between 60 and 80 years of age starts at Rs 3 lakh and that of super senior citizens starts at Rs 5 lakh,while the taxable slab for individuals below 60 years of age starts at an income level of Rs 2.5 lakh.
Senior citizens having income from salary, rent and interest income are exempted from paying advance tax, while younger individuals need to pay advance tax u/s 211 of the Income Tax Act, if the tax payable in a financial exceeds Rs 10,000.
Like their serving counterparts, retired senior citizen employees of Central and State Governments are also eligible for claiming standard deduction up to Rs 50,000 from their pension income.
Tax Exemption on Interest Income
Senior citizens are eligible to get deduction up to Rs 50,000 u/s 80TTB on interest earned from banks and Post Office on savings account, fixed deposits and recurring deposits. On the other hand, individuals below 60 years of age get a deduction up to Rs 10,000 only on interest on savings account u/s 80TTA.
Deduction on Health Insurance Premium
Senior citizens get a deduction up to Rs 50,000 u/s 80D on premium paid on health insurance cover, while individuals below 60 years of age get deduction up to Rs 25,000 only for the same.
Apart from the above, senior citizens also get higher tax benefits / deductions on expenditures made on treatment of specified diseases etc.