Income Tax: How senior citizens can save more - Check useful information, tips

Income Tax: Every salaried individual needs to pay income tax on his or her salary. The amount that goes out as income tax has always been a major concern for taxpayers, especially if you are a senior citizen and are saving or investing for your retirement days. The Income Tax Act recognises any individual above the age of 60 years as a senior citizen. But, there are several ways through which you can save on your hard-earned money. All you need is access to useful information and few smart tips, which we will tell you here.

More exemption

Most of you would know that the income tax department has certain exemption of senior citizens. However, you must know that the for the current financial year i.e. 2019-20, the exemption limit is Rs 3 lakh as compared to Rs 2.5 lakh for the non-senior citizens. This means that only your income above the threshold of Rs 3 lakh will be taxed. An individual aged 80 years or more is granted an even higher exemption limit of Rs 5 lakh.

Then, you also get an exemption of Rs 50,000 from term deposits with banks or post office or co-operative banks. This benefit is extended under Section 80TTB of the income tax. Notably, the interest earned through savings bank account also comes under this Rs 50,000 limit.

Health benefits

Senior citizens can avail tax beneifts of up to Rs 50,000 on health insurance premium under Section 80D of the income tax. The benefit can be claimed by assesses on premiums for self (in case he is a senior citizen), and/or dependent senior citizen parents. This benefit includes preventive health check-up costs up to Rs 5,000.

Apart from this, you can also claim a deduction on medical expenses for self or on dependent children, spouse, parents, brother or sister. The Section 80DDB allows you to avail deduction of up to Rs 40,000 for non-senior citizen and Rs 1 lakh for senior citizens.

TDS reflief

The senior citizens also get relief of up to Rs 50,000 on TDS from interest income. The benefit is extended under Section 194 of the Income Tax Act 1961 and the interest income includes deposits with banks, post offices, co-operative banks and others.