What are the deductions admissible to a Senior Citizen? K G menon
There are not many . A person becomes senior citizen under Income Tax Act in any year after attaining the age of 65 even for one day. Once he attains 65 years, his status as senior citizen in that financial year , gives him some relief .There are not many . These are listed below:
1. Higher Exemption Limit
For FY2007-08, basic exemption limit for tax is fixed at Rs 1,95,000. Therefore, any Sr. citizen having total income till 1,95,000 for Fy 2007-08 , will not have to pay any tax .
2. Reverse mortgage for senior citizens
Reverse mortgage' - a concept introduced by Finance 2007 -provides that a senior citizen will be able to avail of monthly income streams by mortgaging a house owned by him. However, this scheme is yet to materialize.
3. Tax benefits on medical insurance hiked
A senior citizen can avail of higher of higher deduction of Rs 20,000 u/s Section 80D.
4. Higher Deduction u/s 80DDB
Section 80DDB provides deduction to an assessee in case of expense on medical treatment of specified ailments.Generally this deduction is available upto Rs 40,000 . However , if the patient is a senior citizen, then deduction of Rs 60,000 is allowable.
5. No TDS on earning of interest below Rs 10,000
From 1/6/2007 , the interest paid to a senior citizen shall be subject to TDS only if interest paid u/s 194A exceeds Rs 10,000. The said interest should be paid or credited under Senior Citizen Saving Scheme or by co-operative .Read more about it here.