What are the benefits available to senior and very senior citizens?

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 2015-16 is as follows :

Senior citizen Very senior citizen
A senior citizen is granted a higher exemption limitcompared to non-senior citizens. The exemption limit for the financial year 2015-16 available to a resident senior citizen is Rs. 3,00,000. In other words, a resident senior citizen is not liable to pay any tax up to income of 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 2015-16 available to a resident very senior citizen is Rs. 5,00,000. In other words, a resident very senior citizen is not liable to pay any tax up to income of 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.

 

Age Criteria

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-residenteven 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 Laware 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
Illustration Illustration

(1) Mr. Kumar (resident in India) attained the age of 60 years during the financial year 2015-16. Will he qualify as senior citizen under the Income-tax Law for the financial year 2015-16?

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Yes, since Mr. Kumar is a resident and he attained the age of 60 years during the year 2015-16, he will be treated as senior citizen under the Income-tax Law for the financial year 2015-16.

(2) Mr. Kamal (non-resident) attained the age of 60 years during the financial year 2015-16. Will he qualify as senior citizen under the Income-tax Law for the financial year 2015-16?

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Mr. Kamal is a non-resident, the benefits of senior citizen under the Income-tax Law are available to a resident only, and hence, Mr. Kamal will not be treated as senior citizen under the Income-tax Law for the financial year 2015-16.

(1) Mr. Raja (resident in India) attained the age of 80 years during the financial year 2015-16. Will he qualify as very senior citizen under the Income-tax Law for the financial year 2015-16?

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Yes, since Mr. Raja is a resident and he attained the age of 80 years during the year 2015-16, he will be treated as a very senior citizen under the Income-tax Law for the financial year 2015-16.

(2) Mr.Rajat (non-resident in India) attained the age of 80 years during the financial year 2015-16. Will he qualify as very senior citizen under the Income-tax Law for the financial year 2015-16?

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Mr.Rajat is a non-resident, the benefits of very senior citizen under the Income-tax Law are available to a resident only and, hence, Mr.Rajat will not be treated as very senior citizen under the Income-tax Law for the financial year 2015-16.​

 

Exemption from e-filing of tax return

From the assessment year 2015-16 onwards any taxpayer filing return of income in Form ITR 1/2/2A and having a refund claim in the return or having total income of more than Rs. 5,00,000 is required to furnish the return of income electronically with or without digital signature or by using electronic verification code. However, Income-tax Law grants relaxation from e-filing in above case to very senior citizen.

In other words, a very senior citizen filing his return of income in Form ITR 1/2/2A and having total income of more than Rs. 5,00,000 or having a refund claim can file his return of income in paper mode, i.e., for him e filing of ITR 1/2/2A (as the case may be) is not mandatory. However, he may go for e-filing if he wishes.

Exemption from payment of advance taxes

​​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 208 gives relief from payment of advance tax to a retired senior citizen. As per section 208 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.

Expenditure incurred on medical treatment of specified diseases of senior/ very senior citizen

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.

As per section 80DDB, a taxpayer can claim deduction in respect of expenditure incurred by him on medical treatment of specified diseases. The provisions in this regard are as follows: [As amended by Finance Act, 2015]
1)Deduction under section 80DDB can be claimed by an individual or a HUF, who is resident in India.
2) Deduction is available in respect of amount actually paid by the taxpayer on medical treatment of specified disease or ailment (prescribed by the Board, see rule 11DD for prescribed disease or ailment).
3) In case of an individual, the aforesaid expenditure should be incurred on medical treatment of an individual or wholly/mainly dependent spouse, children, parents, brothers and sisters of the individual; and
4) In case of a HUF, expenditure should be incurred on the medical treatment of any member of the family, who is wholly/mainly dependent on such HUF.
The tax payer has to obtain the prescription for the medical treatment from a neurologist, an oncologist, a urologist, a haematologist, an immunologist or such other specialist, as may be prescribed.
Amount of deduction
Amount of deduction will be lower of the following:
(a) amount actually paid on medical treatment specified above; or
(b) Rs. 40,000. However, the limit of Rs. 40,000 will be increased to Rs. 60,000, if the expenditure is incurred on medical treatment of a senior citizen (i.e., any resident individual of age of 60 years or above but less than 80 years and to Rs. 80,000 if the expenditure is incurred on the medical treatment of super senior citizen i.e. resident individual of the age of 80 years or above).
Notes:
1.The taxpayer should obtain a copy of certificate (Form No. 10I) issued by a neurologist, an oncologist, a urologist, a haematologist, an immunologist or such other specialist, as may be prescribed, working in a Government hospital.
2.From the amount of deduction computed in aforesaid manner, amount, if any, received by the taxpayer from any insurer or from his employer, by way of reimbursement for such expenditure shall be deducted.

Expenditure incurred on medical insurance premium of senior/ very senior citizen

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.

As per section 80D, an individual or a HUF can claim deduction in respect of the following payments:
1)Medical insurance premium paid by assessee, being individual/HUF by any mode other than cash.
2)Any contribution made by assessee, being individual to Central Government Health Scheme or such other Scheme as may be notified by the Central Government.
3)Sum paid by assessee, being individual on account of preventive health check-up. Medical expenditure incurred by assessee, being individual/HUF on the health of a very senior citizen person provided that no amount has been paid to effect or to keep in force an insurance on the health of such person.
Policy to be taken or expenditure to be incurred in whose name?
In case of an individual, deduction is available in respect of medical insurance policy taken in his own name, or in the name his/her spouse, his/her parents and his/her dependent children.
In case of HUF, the policy can be taken on the health of any member of such HUF.
Deduction on account of medical expenditure shall be allowed only when it is incurred on the health of the aforementioned persons who are very senior citizens.
Amount of deduction
(1) In case of an individual, amount of deduction cannot exceed:
a.Rs.25,000, in aggregate, in respect of medical insurance premium or any payment made for preventive health check-up.
[This deduction is available if payment is made for benefit of assessee, himself or his/her spouse or dependent children]
b.Rs.25,000, in aggregate, in respect of medical insurance premium or any payment made for preventive health check-up (*). [This deduction is available if payment is made for benefit of parents of assessee.]
c. Rs 25,000 in aggregate in respect of contribution made to the Central Government Health Scheme or any scheme notified by the Central Government [This deduction is available if payment is made for benefit of assessee, himself, his/her spouse or dependent children] [As amended by Finance Act, 2015]
d.Rs 30,000 in aggregate in respect of medical expenditure incurred on the health of assessee, himself, his/her spouse or dependent children or parents. [This deduction is available if amount is paid for benefit of a very senior citizen and no amount has been paid to effect or to keep in force an insurance on the health of such person.](*) total amount of deduction for the expenditure incurred on preventive health check-up of assessee, his family and parents could not exceed Rs. 5,000.
Note: In aforesaid clauses a, b and c. Additional deduction of Rs 5,000 is available when medical insurance is taken on the life of senior citizen.
Amount of deduction in case of HUF
(2) In case of a HUF, amount of deduction cannot exceed Rs.25,000, in aggregate, in respect of premium paid by it on health of any member of such HUF.
The aforesaid limit of Rs. 25,000 will be increased to Rs. 30,000 in following situation:
a) When the premium is paid in respect of any senior citizen (i.e., any resident individual of the age of 60 years or above).
b) When medical expenditure is incurred on the health of a very senior citizen person if no amount is paid in respect of health insurance of such person
Mode of Payments
Payment should be made by any mode other than cash (however, payment on account of preventive health check-up can be made in cash).
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