Income Tax Rules for Super Senior Citizens

Income Tax Rules for Super Senior Citizens – Sources, Tax Slabs, Forms and Deductions

Income Tax Rules for Super Senior Citizens: Income tax is always payable if any person earns income within a particular financial year. This tax is levied in rates, which vary on the aggregate income.

Seniors And Super Seniors

In order to create slabs for income tax purposes, the senior population is divided into two strata. The population, which lies between the age group of 60 to 80, is tagged as the ‘senior population’. The population that lies above the age group of 80 years is termed the ‘super senior population’.

The super senior population includes individuals who are born on or before 1st April 1935. The limit of income for this group of individuals is five lakhs, above which tax is levied.
There are five significant heads under which an individual can earn:

  • Income accrued from salary
  • Income accrued from capital gains
  • Income accrued from the property
  • Income accrued from own profession or business
  • Income accrued from sources other than these

What Are The Sources Of Income for Super Senior Citizens?

The numerous income sources of super senior citizens of the country are:

  • Pension
  • Interest received on savings account
  • Interest received on fixed deposits
  • Rent accrued from renting own property or house
  • Income from various schemes in a post office

What Is The Tax Slab for The Super Senior Citizens?

For the super senior citizens, there are three levels of tax as per the Indian government. These are as follows:

  • If the income of the person is below or equal to INR 500,000, there is no tax levied.
  • If the income of the individual is between the range of INR 500,001 and 10,00,000, then tax is charged at 20%.
  • If the income of the person exceeds INR 10,00,001, then tax is set at 20% of the income that goes beyond INR 500,001 and 30% of the income that goes above INR 10,00,001.

However, this tax slab has been revised with new rates and income divisions. This slab is applicable for the FY2020-21 and ahead. These slabs are as follows:

  • If the income of the super senior citizen is below or equal to 2.5 lakhs, then no tax is levied.
  • If the income of the super senior citizen is between the range of INR 250,001 and INR 500,000, then tax is levied at 5%.
  • If the income of the super senior citizen is between the range of INR 500,000 to INR 750,000, then tax is levied at 10%.
  • If the income of the super senior citizen is between the range of INR 750,001 to INR 10,00,000, then tax is levied at 15%.
  • If the income of the super senior citizen is between the range of INR 10,00,001 to INR 12,50,001, then tax is levied at 20%.
  • If the income of the super senior citizen is between the range of INR 12,50,001 to INR 15,00,000, then tax is levied at 25%.
  • If the income of the super senior citizen exceeds INR 15,00,001, then tax is levied at 30%.

Forms To Fill Depending On Income Slab

The tax rate modifies according to income, but the form that has to be filled also varies. There are four forms, ITR 1, 2, 3 and 4, which the super seniors can fill.

The income of super seniors, when accrued from salary, reaches INR 50 lakhs, and from agriculture, renting a house property, etc. reaches 5,000, he or she should file ITR 1. If the income comes to INR 50 lakhs, the source being salary, rents, property, gains from capitals, and agricultural income beyond 5,000, super seniors should fill up ITR 2.

The super senior citizens are required to file ITR 3 if their source of income is their profession or any business. They will fill up ITR 4 for any presumptive income.

Deductions That Super Seniors Can Avail

There are specific ways in which super senior citizens can demand deductions. This is mainly in the form of medical expenses. As a super senior, an individual can claim till 1 lakh for spending on medical grounds like strokes, cancer, etc.

Another deduction that super seniors can avail of is payments for health insurances. Any premium paid towards health insurance comes under section 80D, and the maximum limit to demand under this section is INR 50,000.

Another deduction is available under section 80DD. Under this section, super seniors can make deductions if they are incurring expenses for the treatment of any disabled person. Under this section, they can demand a deduction of up to INR 75,000 if the range of disability is between 40% to 80%. If the disability is severe, i.e. more than 80%, the citizen can push the deduction limit to INR 1,25,000.

If super seniors make any contribution towards any political party, then that comes under section 80GGC. This section also includes any contribution made towards an electoral trust. Super seniors can also make a claim for deduction if they have contributed towards any charitable cause or institution. This comes under section 80G.

Super seniors can also earn benefits under section 80TTB. This section covers the interests earned from sources like post offices, banks, or cooperative banks. Under this section, super seniors can claim up to INR 50,000 as deductions. This limit was applicable till the financial year 2018-19.

There exists another special section under which the super seniors can claim their tax deductions. If any super senior suffers from any kind of mental retardation or disability, they can claim deductions under section 80U.

The limit under this section is fixed. The amount is INR 75,000. However, if the citizen suffers from severe mental retardation or disability, then the super senior citizens can raise this amount to INR 1.25 lakhs.

The Income Tax Act also gives special allowances or deductions if any super senior earns money as a reverse mortgage. This scheme allows the super senior to avail EMIs on the property value. This EMI payment can be continued lifetime and will be a source of income for the super senior citizen. All of these deductions are specific to Indian citizens and can be availed through respective forms.

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