Income Tax: As the deadline for filing income tax returns is approaching, it becomes important to understand the different rules for senior and super senior citizens. The Income Tax Department has fixed exemptions, deductions and benefits for senior citizens and super senior citizens as per the Income Tax Act 1961.
Income Tax: As the deadline for filing income tax returns is approaching, it becomes important to understand the different rules for senior and super senior citizens. The Income Tax Department has fixed exemptions, deductions and benefits for senior citizens and super senior citizens as per the Income Tax Act 1961. Through this, senior citizens can save lakhs of rupees. The Income Tax Department provides special Income Tax Return (ITR) forms to senior citizens to file their tax returns, in which they can avail tax exemptions.
Senior citizens need these forms for tax filing
Senior citizens have to file ITR forms based on their income category. Pensioners with income less than Rs 50 lakh in a financial year can use Sahaj i.e. ITR 1 for tax filing. People with income from assets, other sources or capital gains should opt for ITR-2. Pensioners who are businessmen or earn income from business should file taxes using ITR-3 or ITR-4.
Tax limits
Senior citizens are entitled to a basic limit of Rs 3 lakh, while super senior citizens (80 and above) have a limit of Rs 5 lakh. The basic limit is also Rs 3 lakh for those covered under the new tax regime (section 115BAC of the Income Tax Act, 1961). Tax rates also vary, from no tax on income up to Rs 3 lakh to 30% on income above Rs 10 lakh.
Form 16
Senior citizens who receive income in the form of pension are entitled to receive Form 16 from their employer. Form 16 contains the components of their salary and also details the TDS. Senior citizens can claim all the details in Form 26AS.
Deductions
Interest income
Senior citizens tend to ignore claiming the necessary tax deductions. Senior citizen savings schemes encourage investors to avail Section 80C deductions. Section 80TTB allows senior citizens a deduction of up to Rs 50,000 on interest income from their bank accounts. It is important to note that individuals opting for the new tax regime will not be eligible to benefit from these deductions.
Form 15H
Banks generally deduct TDS when the interest earned by a senior citizen exceeds the applicable limit of Rs 50,000 in a financial year. Senior citizens can request their banks not to deduct TDS if their income is below the taxable limit. To do so, senior citizens can submit Form 15H to their banks. Form 15H can be kept handy while filing tax returns.
