Save tax up to ₹75,000 ~ u/s 80D.
HEALTH INSURANCE FOR SENIOR CITIZENS
As taxpayers, we have certain duties to fulfil. At the same time, there are certain provisions in the income tax laws that help us lessen our tax liability. For instance, taxpaying individuals who belong to the category of senior citizens and super senior citizens enjoy certain tax benefits. Senior citizen is an individual who is aged between 60 and 80 years whereas a super senior citizen is an individual who is above 80 years of age.
Elderly people have a greater need for financial security as life after retirement brings a lot of challenges. Thus, it is wise to plan ahead and build retirement savings. Furthermore, as aging increases health risks, it is also wise to invest in a senior citizen health insurance plan that will cover various medical expenses an individual may incur in a year. This includes hospitalisation expenses, annual medical check-ups, pre-hospitalisation and post-hospitalisation medical expenses, and alternative treatment.
When it comes to income tax for super senior citizen, the government provides certain tax benefits to them that prove helpful in achieving savings.
In this article, we shall discuss about the income tax benefits available for super senior citizens.
As per the Financial Budget 2020-21, optional tax slabs were introduced. Senior citizens and super senior citizens can opt for either the previous slab rate (FY 2019-20) or the new slab rate.
The tax slabs for senior citizens and super senior citizens vary from that of taxpayers of other categories. For senior citizens, income up to the limit of Rs 3 Lakh is exempt from tax whereas for super senior citizens the limit is up to Rs 5 lakh.
For a super senior citizen, the tax rate is 20% on income exceeding Rs 500,000 up to Rs 10 lakh. For income above Rs 10, 00,001, the applicable tax is 30%.
>> Also read The latest income tax slabs for senior citizens and special tax benefits
>> And Newly Drafted One Nation, One Common ITR: Here's All that You Need to Know
Opting for a health insurance plan will help a family achieve savings in more than one way. Firstly, it minimises the burden of medical expenses. Secondly, the one can get tax deductions on the premium paid, under Section 80D of the Income Tax Act, 1961.
For those below 60 years of age, the deduction is Rs 25,000 on the health insurance premium paid for self, spouse and dependent children covered in a policy. Senior citizens and super senior citizens are offered higher tax deduction of Rs 50,000. Senior citizens can also avail tax benefits on the actual expenses which they incur on their medical treatment. If you and your parents are senior citizens, you can avail tax benefits up to Rs 1,00,000.
Advance tax refers to the income tax one should pay if the total tax liability in a financial year is Rs 10,000 or above. Senior citizens are not required to pay advance tax unless they receive income from business or profession. If they do not own any business, they have to pay self-assessment tax.
Super senior citizens are given the provision of filing their income tax return (ITR) through Sahaj (ITR 1) or Sugam (ITR 4) to claim tax refund. They can file ITR through either online or offline mode during a financial year.
Senior citizens are allowed to claim tax deduction of Rs 1 lakh for medical expenses in case of specific critical illnesses. The government has recently raised the deduction limit of Rs 60,000 for senior citizens and Rs 80,000 for super senior citizens to Rs 1 lakh. This benefit of income tax for super senior citizen proves to be advantageous for elderly people who seek financial security and reduced tax burden.
There is a standard deduction of Rs 50,000 (or amount of pension, whichever is less) for pensions received from former employer. This is applicable for annuity payments that are taxable in the same way as salaried income.
To reduce the burden of medical expenses, senior citizens can avail health insurance and get tax deduction of Rs 50,000 in a financial year under Section 80D of the Income Tax Act. Opt for ‘Care Senior’ which is a health policy designed with unique benefits for senior citizens.
Disclaimer: The above information is for reference purposes only. The tax exemptions are subject to the rules and regulations of the Income Tax Act of India 1961.
Published on 13 Dec 2024
Published on 13 Dec 2024
Published on 13 Dec 2024
Published on 12 Dec 2024
Published on 11 Dec 2024
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