Relaxations for Senior/Super Senior Citizens under the Income Tax Act

An individual who is a resident in India will be regarded as a senior citizen if he has attained the age of 60 but less than 80 years at any time during the year. In addition to this if his age is 80 years or more at any time during the previous year then he shall be regarded as a super senior citizen.

Many relaxations are provided under the Income Tax Act with respect to the senior and super senior resident persons for ease of compliance and other additional monetary benefit provided certain conditions are satisfied.

Topics covered in this article are as follows: 

1. Relaxations from Compliances

1.1 No Advance Tax if there is no Business Income

1.2 Exemption from Filing of Return of Income

1.3 Option to File Return Manually

2. Higher Exemptions

2.1 Higher Basic Exemption Limit

2.2 Higher Exemption of Medical Insurance

2.3 Higher Exemption of Medical Insurance

2.4 Higher Deduction with respect to Interest Income”

2.5Higher Deduction for Medical Treatment

1. Relaxations from Compliances

1.1 No Advance Tax if there is no Business Income

Advance Tax is required to be paid in the year in which the income is earned. It is ‘pay-as-you-earn’ tax scheme. However, exemption has been granted to a senior and super senior person to pay advance tax. Any person who has attained the age of 60 or more at any time during the year, is not required to pay advance tax in that year provided he does not have income taxable under the head “Profits and gains from business or profession”.

1.2 Exemption from Filing of Return of Income

The Finance Act, 2021 has inserted Section 194P to provide relaxation from filing the ITR in case of resident senior‐citizen aged 75 years or more at any time during the previous year. Such person is not required to file the ITR for the relevant previous year if he is earning pension income only and interest income from bank in which pension is received. Exemption shall be subject to furnishing of declaration to the bank by senior citizen.

1.3 Option to File Return Manually

The return of income can be filed electronically on the e-filing portal. However, certain class of taxpayers can file the return in paper format in their jurisdictional tax office. The option to file the income-tax return in paper mode is available only to a super senior citizen (whose age is 80 years or above during the financial year) only if return is being filed in ITR 1 (Sahaj) and ITR 4 (Sugam).

2. Higher Exemptions

2.1 Higher Basic Exemption Limit

In case of senior citizens and super senior citizens, higher basic exemption limit has been prescribed which is as follows:

2.2 Higher Exemption of Medical Insurance

Senior citizens are provided higher deduction under section 80D with respect to medical expenditure amounting to Rs. 50,000. In addition to this senior citizen is also provided deduction for medical expenditure incurred during the year subject to a limit of Rs. 50,000. Following table shows the deduction available under section 80D with respect to various expenditure, insurance etc.

2.3 Higher Deduction with respect to Interest Income

An individual, being a senior citizen[1], deriving income in the nature of interest on bank deposits including fixed deposit is allowed to claim deduction under section 80TTB. The assessee can claim a deduction of an amount equals to interest credited to his account or Rs. 50,000, whichever is lower.

2.4 Higher Deduction for Medical Treatment

Section 80DDB provides deduction in respect of the amount incurred for the medical treatment of prescribed disease or ailment. The assessee is eligible to claim deduction for the amount actually paid for the medical treatment of a specified disease or ailment or Rs. 1,00,000, whichever is lower.

[1]Senior citizen means a resident individual whose age is 60 years or more at any time during the previous year.