Senior Citizen Tax Exemptions

Various Senior Citizen Tax Exemptions are available in India. Let's discuss some of the tax exemptions/deductions here.

Under the Income-tax Act in India, an individual who is of the age of 65 years or more at any during the previous year, is a Senior Citizen. 

Exemption Limit

Firstly, Senior Citizens enjoy a higher exemption limit than other assessees, viz., Rs.2,25,000 (for Assessment Year 2009-10). Therefore, they need not pay tax up to this limit.

Refer Tax Rates for Senior Citizen

Deduction on Expenses: -

Further, senior citizens enjoy additional tax benefits with relation to certain expenses: -

• Section 80C (Senior Citizen Fixed Deposits) -

  Amount invested by senior citizens in the Senior Citizen FD Schemes with Banks, which bear special interest rates also in certain cases, are eligible for complete income tax deduction under section 80C up to the ceiling of Rs.1,00,000.

• Section 80D (Medical Insurance Premium)

  • Up to Assessment Year 2008-09, deduction available - Rs.10,000 and an additional Rs.5,000 available if premium paid in the name of Senior Citizen members in the family.

  • From Assessment Year 2009-10, Premium paid for Individual (Self), Spouse & Children - deduction of Rs.15,000 available and an additional Rs.20,000 available if premium paid in the name of Senior Citizen parents of the individual.

• Section 80DDB (Treatment for specific diseases)

  Deduction for treatment to members who are Senior Citizens - Rs.60,000.

Bank Reverse Mortgage

Also, in the case of senior citizens, the transfer of immovable property to the banks under reverse mortgage scheme notified are not regarded as transfer as per section 47.

Further the amount received under such scheme of reverse mortgage are not treated as income - section 10(43). 

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