Senior citizens or retired individuals have limited means of income. However, they can still earn a living through pensions, interests on savings, rental income, fixed deposits, reverse mortgage and post office savings.
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Income earned through such avenues is still taxable under Section 80C of the Income Tax Act. According to a Central Board of Direct Taxes (CBDT) directive, cases of senior citizens cannot be scrutinised unless an assessment is necessary on the basis of credible information, Bankbazaar.com said.
Finance minister Piyush Goyal in the interim budget announced the following tax deduction limits and benefits for the senior citizens:
According to Bankbazaar.com, under Sections 80D and 80DDB, senior citizens can also avail tax deductions of up to Rs 50,000 on the medical insurance premium and Rs 1 lakh for medical treatment of certain critical ailments. Under the Varishtha Bima Yojana, senior citizens need not pay service tax on the premium.
They can also avail a 50 percent exemption on interest income for banks and post-office deposits (including fixed deposits and recurring deposits). Short-term capital gains are also exempted from tax if the basic limit at 15 percent is not exceeded. Under section 80L, senior citizens can avail tax exemptions on interest up to Rs 12,000 per annum.
As per Bankbazaar.com, here's how senior citizens can file for income tax:
Like any other individual with a taxable income, senior citizens are also required to file their income tax return to claim their tax refund.
ITR I – Individual whose total Income Includes:
ITR 2 – Individual whose total Income Includes:
First Published: Feb 15, 2019 2:50 PM IST
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