Income Tax ALERT! EPFO subscriber? Senior citizen? You can save more money! Here is how

Income Tax Alert: If you are a senior citizen and your taxable income is above Rs 5 lakh, then you come under the purview of income tax outgo. However, according to the tax and investment experts, such senior citizens who have income above Rs 5 lakh can save their income tax by claiming the standard deduction. Under Section 87A of the Income Tax Act, those who are earning up to Rs 5 lakh are the standard deduction of Rs 12,500. But, this Section 87A rebate is applicable only for those whose earning is not more than Rs 5 lakh.

Speaking on the matter Jitendra Solanki, a SEBI registered tax and investment expert said, "If you are getting EPFO pension and your taxable income is not more than Rs 5 lakh, then you are exempted from any income tax outgo as the Indian government is giving standard deduction of Rs 12,500 under the Section 87A of the Income Tax Act." However, Solanki said that an earning individual is getting Rs 50,000 standard deduction annually.

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The provision of standard deduction was introduced in the financial year 2004-05. Later on, it was changed and replaced by transport allowance and health insurance. In the transport allowance, an earning individual was given Rs 19,200 per annum and Rs 15,000 per annum for health insurance. In 2018, the standard deduction was reintroduced with Rs 40,000 which got inflated in 2019 to Rs 50,000.