Did you know about these 10 special Tax Benefits offered to Senior Citizens?

India is among the countries where elders are well-taken care of. There are a few programs that are currently being run by the government that offer special tax benefits to the senior citizens. The tax benefits are provided so that the senior citizens don’t face financial crunch in the last phase of their lives. Read on to learn more about the tax benefits offered to senior citizens.

Before looking at the tax benefits, one must know the definition of a senior citizen. As per the Income Tax Act, any person aged 60 years or above is considered as a senior citizen. Previously, any person who was 65 years of age or above was considered a senior citizen. However, with effect from the FY 2011-12, it was reduced by 5 years. Individual who are of age 80 years or above, come in the category of very senior citizens.

Here are few of the income tax reliefs offered to senior citizens.

From the assessment year 2015-16, the limit of tax exemption for senior citizens was increased from from Rs 2.5 Lakh to Rs 3 Lakh. A new category of Very Senior Citizens for people who are 80 years old or above was created. Individuals belonging to the very senior citizen category are eligible for tax exemptions of up to Rs 5 Lakh from the assessment year 2012-13.

Under reverse mortgage, a senior citizen can avail monthly income by mortgaging any accommodation owned by him/her. The reverse mortgage is to be created as per the scheme notified and made by the Central Government, and is not transferable.

Earlier, senior citizens were eligible for tax exemption of Rs 20,000 under Section 80D, but from the assessment year 2016-17, the limit has been increased to Rs 30,000.

With the assessment year 2016-17, any expenditure made on medical care expenses for a very senior citizen attracts tax benefits. In case no expenditure is made and the health insurance premium doesn’t exceed Rs 30, 000; it shall be eligible for deduction under section 80D of the Income Tax Act.

Section 80DDB of the Income Tax Act offers tax deductions to a policyholder on the basis of the expenses incurred on the treatment of certain diseases. This tax exemption is generally offered up to Rs 40,000. But, a tax exemption of Rs 60,000 is allowed in case a senior citizen undergoes medical treatment. And from the assessment year 2016-17 onwards, a tax exemption of up to Rs 80,000 is allowed for expenses incurred on medical treatment for a very senior citizen.

To lessen the inconveniences, the Central Board of Direct Taxes has made changes in its selection process for scrutiny. Cases that involve senior citizens will only be scrutinized when the IT department has credible information to act on.

According to the Section 208 of the Income Tax Act, any senior citizen who is a resident of India and is not earning any income chargeable under the head of “Profits and Gains of Business or Profession” won’t need to pay any advance tax. Such senior citizens are now permitted to discharge his/her liability by self-assessment.

Senior citizens draw a higher rate of interest of up to 50 basis pointson fixed deposits of 5 years or more.This hasnow been completely exempted from the total income as per Section 80C of the Income Tax Act.

A senior citizen enjoys tax benefits on Tax Deducted at Source (TDS). This exemption is available on interest earned on deposits. To avail the tax benefit, senior citizens need to submit Form 15H as per the Section 197 of the Income Tax Act.

From the assessment year 2015-16, any tax payer who files his/her tax return in Form ITR 1/2/2A and has a refund claim or has a total income of ₹5 Lakh or more needs to file the tax return electronically. This rule has been relaxed for very senior citizens, so tax filing is convenient for them.

These benefits offered under the Income Tax Act are to help senior citizens remain financially stable,as things like getting a health insurance shouldn’t financially peg the senior citizens. So, if you are a senior citizen or your parents are senior citizens, you should buy them health insurance in the knowledge that there are so many benefits to avail.

• Discount on premium for spouses - Enrolling your spouse in the plan may help you get a discount on the premium.
• Domiciliary treatment - Some plans cover domiciliary treatment expenses involved in getting a treatment done at home, which otherwise would need hospitalization.
• Organ donor expenses - Some plans even cover organ donor expenses.
• Ambulance charges - Ambulatory charges may be covered but up to a limit.
• E-opinion - Some plans let you avail e-opinion, usually a second opinion from a medical practitioner per policy year.
• Not all plans cover OPD charges - Some plans may cover OPD charges, but, there will be a limit to the cover of practitioner’s fees.

Gather complete information on the policy coverage including the exclusions, sub limits, and other clauses involved. It is best to assess your requirement first, and only then purchase a health plan.

• Star Health Senior Citizen Red Carpet Health Insurance Policy
• SBI- Arogya Top Up Policy
• Bajaj Allianz- Silver Health Plan for senior citizen
• Apollo Munich- Optima Senior
• Religare- Care Freedom Health Insurance

• Less than 10 percent in the population of Indian has health insurance, and approximately 72 percent of the Indians are spending out-of-pocket for the health care costs.
• By 2050, India is expected to have a population of 300 million elderly people.

With increase in the age, the chances of developing chronic disease such as asthma, angina, arthritis, depression, and diabetes, increases. Hence, it is very important to live a healthy life and have a health insurance plan to meet the oncoming healthcare needs. Furthermore, as seniors do not have a steady source of income after retirement, it is necessary to have financial security in the form of health insurance as that allows them to face any medical emergency knowing they are financially covered for the healthcare expenses.