For the financial year 2022-23, senior citizens (60-79 years) and very senior citizens (80 years and above) benefit from higher tax exemption limits compared to non-senior citizens. Senior citizens have an exemption limit of ₹3,00,000, while very senior citizens have a limit of ₹5,00,000, offering significant tax relief. Senior citizens also benefit from exemptions on advance tax payments if they have no business income and can claim a deduction of up to ₹50,000 on interest income from deposits. Furthermore, there is no tax deduction at source for interest earned up to ₹50,000 from banks for senior citizens. For medical expenses, senior citizens can claim deductions under Sections 80DDB and 80D. Although there is no overall exemption from filing returns, the Finance Act, 2021 introduced Section 194P, allowing those aged 75 and above, with pension and interest income, to have tax deducted by banks without needing to file returns, provided they meet specific conditions.
Q1. What are the benefits available to a senior citizen and very senior citizen in respect of tax rates?
Ans: Senior citizens and a very senior citizen are granted a higher exemption limit as compared to normal tax payers. Exemption limit is the quantum of income up to which a person is not liable to pay tax. The exemption limit granted to senior citizen and very senior citizen for the financial year 2022-23 is as follows :
| Senior citizen | Very senior citizen |
| A senior citizen is granted a higher exemption limit compared to non-senior citizens. The exemption limit for the financial year 2022-23 available to a resident senior citizen is Rs. 3,00,000. The exemption limit for non-senior citizen is Rs. 2,50,000. Thus, it can be observed that an additional benefit of Rs. 50,000 in the form of higher exemption limit is available to a resident senior citizen as compared to normal tax payers. | A very senior citizen is granted a higher exemption limit compared to others. The exemption limit for the financial year 2022-23 available to a resident very senior citizen is Rs. 5,00,000. The exemption limit for non-senior citizen is Rs. 2,50,000. Thus, it can be observed that an additional benefit of Rs. 2,50,000 in the form of higher exemption limit is available to a resident very senior citizen as compared to normal tax payers. |
Q2. At what age a person will qualify as a senior citizen and very senior citizen under the Income-tax Law?
Ans: Before understanding the age criteria, it is very important to know that the tax benefits offered under the Income-tax Law to a senior citizen/very senior citizen are available only to resident senior citizen and resident very senior citizens. In other words, these benefits are not available to a non-resident even though he may be of higher age. The age and other criteria to qualify as a senior citizen and very senior citizen under the Income-tax Law are as follows :
| Criteria for senior citizen | Criteria for very senior citizen |
| Must be of the age of 60 years or above but less than 80 year at any time during the respective year. | Must be of the age of 80 years or above at any time during the respective year. |
| Must be resident | Must be resident |
Q3. Is there any special benefit available under the Income-tax law to senior citizens?
Ans: Yes, the Income-tax Law very well takes care of the senior citizens of the nation by offering them several tax benefits. In this part you can gain knowledge of various benefits offered by the Income-tax Law to senior citizens.
Q4. Is a very senior citizen granted exemption from e-filing of income tax return?
Ans: A very senior citizen filing his return of income in Form ITR 1/4 can file his return of income in paper mode, i.e., for him e filing of ITR 1/4 (as the case may be) is not mandatory. However, he may go for e-filing if he wishes.
Q5. Is a Resident senior citizen granted exemption from payment of advance tax?
Ans: As per section 208, every person whose estimated tax liability for the year is Rs. 10,000 or more, shall pay his tax in advance, in the form of “advance tax”. However, section 207 gives relief from payment of advance tax to a resident senior citizen. As per section 207 a resident senior citizen (i.e., an individual of the age of 60 years or above during the relevant financial year) not having any income from business or profession, is not liable to pay advance tax.
Q6. What are the benefits available in respect of interest on deposits in case of senior citizens?
Ans: Section 80TTB of the Income Tax law gives provisions relating to tax benefits available on account of interest income from deposits with banks or post office or co-operative banks of an amount upto Rs. 50,000 earned by the senior citizen (i.e., an individual of the age of 60 years or above). Interest earned on saving deposits and fixed deposit, both shall be eligible for deduction under this provision.
Section 194A of the Income Tax law gives corresponding provisions that no tax shall be deducted at source from payment of interest by bank or post-office or co-operative bank to a senior citizen up to Rs. 50,000. Therefor limit is to be computed for every bank individually.
Q7. What are the benefits available in respect of expenditure incurred on account of medical treatment of specified diseases on treatment of a senior citizen?
Ans: section 80DDB of the Income-tax Law gives various provisions relating to tax benefits available on account of expenditure on medical treatment of specified diseases. Click the following link to know about details of section 80DDB which covers the details of special benefits under section 80DDB available to a senior citizen. Check page 8 topic “Deduction in respect of expenditure on medical treatment of specified diseases [ section 80DDB]”
Q8. What are the benefits available in respect of expenditure incurred on account of medical insurance premium/ medical expenditure to a senior citizen and on account of?
Ans: Section 80D of the Income-tax Law gives various provisions relating to tax benefits available on account of payment of medical insurance premium and other related items. Click the following link to know about details of section 80D which covers the details of special benefits under section 80D available to a senior citizen. Check page 5 topic “Deduction in respect of medical insurance premium [ Section 80D]”
Q9. Is a senior citizen exempts from filing Income-tax return (ITR)?
Ans: Income-tax Act, 1961 provides no exemption to senior citizen or very senior citizen from filing of return of income. However, to provide relief to the senior citizens (whose age is 75 years or more) and to reduce the compliance burden on them, the Finance Act, 2021, has inserted a new section 194P.
This provision requires a banking company to deduct tax under this provision if deductee is maintaining an account with it in which he is receiving his pension income. The tax is required to be deducted under this new provision if the recipient is a resident individual whose age is 75 years or more at any time during the year and the following conditions are fulfilled:
a) Total Income of the deductee consists only income in the nature of pension and interest received or receivable from any account maintained with deductor (such bank); and
b) Deductee has furnished a declaration to deductor containing prescribed particulars.
If the above conditions are satisfied, the deductor shall compute the income of deductee after giving effect to the deduction allowable under Chapter VI-A and rebate under section 87A. Tax on such income is required to be deducted on the basis of rates in force.
If tax is deducted from the income of such senior-citizen, he shall not be liable to furnish the return of income for the previous year in which tax has been deducted.