Income Tax News: The government aimed to provide citizens with a standardised framework, so most benefits and deductions were eliminated with the implementation of the new income tax returns filing regime. This implied that the majority of the deductions that had previously been possible would no longer be possible.
Continued Benefits for Seniors
Seniors, however, don’t need to worry. The majority of the benefits and deductions under the previous regime are still available to them. Stated differently, they can opt for the new regime or the old one and profit from lower slab rates. Furthermore, they were eligible to deduct medical costs paid for the year as well as the amount of money they would have to pay insurance companies in the event that they needed to be hospitalised.
Who is a senior citizen?
Senior citizens in India are defined as those who are 60 years of age or older by the government. However, the advantages are only available to those who live in India. Under the previous tax system, senior citizens were eligible for a number of tax benefits, including standard deductions, advance tax payments, deductions for medical insurance premiums, interest earned from banks and post offices, and more. This article examines several strategies for individuals 60 years of age or older to maximise their income tax deductions when completing their income tax returns (ITR).
Tax slab for senior citizens
Senior citizens are entitled to a higher basic tax exemption limit than regular taxpayers under the IT regulations. “For individuals aged 60 to 80 years, the basic exemption limit is Rs. 3,00,000 (for the financial year 2022-23), and for people below the age of 60, this limit is Rs. 2,50,000,” stated Amit Gupta, Managing Director at SAG Infotech. By taking advantage of this increased exemption limit, seniors can lower their taxable income and save money on ITR filing.
Deductions under Section 80C
Section 80C allows senior citizens to deduct a variety of expenses and investments from their income. A deduction of up to Rs 1.5 lakh from the total taxable income is permitted under this income tax rule. To lower their Section 80C tax liability, senior citizens can invest in programmes like the Public Provident Fund (PPF), National Savings Certificates (NSC), Senior Citizen Savings Scheme (SCSS), and life insurance premiums.
Health Insurance Premium
The cost of healthcare is typically higher for seniors than for younger adults. They can acquire health insurance plans in order to be eligible for Section 80D deductions. Seniors who pay health insurance premiums for themselves, their spouse, their dependent children, their parents, etc., may deduct up to Rs 50,000 from their income. In addition, individuals who are 60 years of age or older can deduct up to Rs 50,000 from their taxes for medical costs, including personal or spouse treatment. This is on top of the deduction from health insurance.
Deduction for specific disease treatments in medicine
Under Section 80DDB, senior citizens can deduct up to Rs 1 lakh from their taxes for costs related to treating certain diseases for themselves, their spouse, and any dependents.
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