The phrase ‘life begins after retirement’ is quite right. However, a relaxed, healthy, and financially secured retired life is only possible if one has spent time on prior planning. Senior citizens are in a life-stage where they need quality medical care owing to increased health risks. They also need steady financial support - an income source - to fulfil their daily needs.
Customised health insurance plans for senior citizens offered by health insurers like Care Health Insurance (Formerly Religare Health Insurance) has made lives easy for the elderly. The government, too, provides tax benefits, including a standard deduction for senior citizens, which are beneficial for achieving savings.
This article explains the income tax standard deduction for senior citizen that one can avail.
Standard Deduction for Senior Citizens
A standard deduction up to Rs 40,000 was introduced in Union Budget 2018 in lieu of exemptions that were allowed earlier viz. transport allowance and the reimbursement of miscellaneous medical expenditures. The provision of standard deduction had existed earlier and was part of the Income Tax Act. It was withdrawn in the Budget 2005-06.
As per the Interim Budget of 2019-20, when the government announced various relief measures for taxpayers, the limit of standard deduction was also increased up to Rs 50,000. It is a reason to cheer as this benefit is available for all salaried individuals, including retired persons. It helps by reducing their taxable salary and achieving savings. The deduction is made from the gross salary, and one can claim it as a tax exemption. Earlier, one had to provide necessary documents for availing benefits of transport allowance and medical reimbursement. However, for claiming the standard deduction, senior citizens and other individuals are not required to furnish any specific document.
Individuals under the senior citizen category are eligible for a standard deduction of Rs 50,000 in a financial year (or amount of pension, whichever is less) for pension received from former employers. The standard deduction for senior citizens is applicable for annuity payments which are taxable in the same way as income under the head ‘salaries’. This is highly beneficial for retired persons who can look forward to significant savings.
The government offers various tax benefits, such as income tax standard deduction for senior citizen, to allow the elderly people to embrace a comfortable life post-retirement. Also, senior citizens can avail of tax benefits on the actual expenses they incur on medical treatment. In India, healthcare costs are skyrocketing. This fact hints at the need for a customised health insurance policy that would provide comprehensive cover for a host of medical expenses.
Your aging parents can secure their health by choosing ‘Care Senior’ which is a senior citizen health insurance cover from CHI. The policy offers benefits like in-patient hospitalisation, cover for pre-and-post hospitalisation medical expenses, and ambulance cover. Besides, there are features such as alternative treatment cover and annual health check-ups that ease their financial burden. Additionally, the cashless treatment facility offered at over 7800 network hospitals simplifies the process of paying hospital bills.
Furthermore, there are tax benefits for senior citizens under the health insurance policy. According to Section 80D of the Income Tax Act, 1961, senior citizens can claim income tax deduction maximum up to Rs 50,000 on the premium paid for the policy.