Q. What is the income tax exemption limit for senior citizens?

Ans: Under the old tax regime, the basic income tax exemption limit is â¹3 lakh for senior citizens and â¹5 lakh for super senior citizens (people aged 80 and above). Under the new tax regime, there is a basic exemption limit of â¹4 lakh for all individuals, irrespective of age.

Q. Are all senior citizen tax benefits that were available in the old tax regime available in the new tax regime?

Ans: No, not all tax deductions for senior citizens are available in the new tax regime. For instance, Sections 80D, 80DDB and 80TTB are applicable only in the old tax regime. However, senior citizens can still claim some benefits, such as a standard deduction on pension from the former employer, under the new tax regime.

Q. Can senior citizens claim tax benefits on fixed deposits?

Ans: Yes, senior citizens can claim tax deductions up to â¹50,000 under Section 80TTB for interest earned on fixed deposits. This limit also includes interest income from savings accounts and recurring deposits; however, it is available only in the old tax regime.

Q. Can senior citizens claim tax deductions if they do not earn a salary?

Ans: Yes, senior citizens can claim tax deductions even if they do not earn a salary. Even without earning a regular income from a salary, retired senior citizens may have tax liability from income from pensions, rents and interest earned on deposits. By claiming deductions against these incomes, senior citizens can lower their tax liability or claim a tax refund. Senior citizens can claim deductions under Section 80D, 80TTB and standard deductions on the pension received from a former employer.

Q. What are the deductions allowed for senior citizens in the new tax regime?

Ans: While the New Tax Regime allows only limited deductions, senior citizens can claim a standard deduction of up to â¹75,000 on income from salary or pension.

10 Special Tax Benefits for Senior Citizens on Health Insurance

Who is a Senior Citizen?

According to the Indian Income Tax Act, a resident individual aged 60 years or above is qualified as a senior citizen. Resident individuals aged 80 years and above are classified as super senior citizens.

It is to be noted that special tax benefits are available only to Indian residents; they are not applicable to a non-resident Indian (NRI) aged 60 and above.

Special Tax Benefits for Senior Citizens

Here are the 10 key income tax benefits offered to senior citizens in India:

Higher Basic Exemption Limit

Compared to regular (non-senior citizen) taxpayers, senior citizens are entitled to a higher income tax exemption limit under the Old Tax Regime. This means that tax for elderly people is deducted at a higher annual income level than for non-senior citizens.

Here is the latest tax deduction limit:

Under the Old Tax Regime-
- Senior Citizens: Annual income up to ₹3 lakh is tax-free.
- Super Senior Citizens: Annual income up to ₹5 lakh is tax-free.
Under the New Tax Regime-

The basic tax exemption limit is ₹4 lakh for all individuals, irrespective of their age.
Higher Deductions for Health Insurance (Section 80D)

Tax deductions of ₹50,000 are allowed on premiums paid for a senior citizen health insurance policy under Section 80D. If a senior citizen pays a premium for their parents too, they can claim an additional tax deduction of up to ₹50,000, bringing the total claimable amount to up to 1 lakh.
Tax Deductions on Medical Expenses (Section 80D)

Tax deduction on medical expenses is allowed up to ₹50,000 for uninsured senior citizens. However, this option is available only to elderly people without an active medical insurance and only the expenses incurred for the treatment of senior citizens can be claimed as a deduction.
Higher Deductions for Specific Disease Treatment ( Section 80DDB)

Section 80DDB offers a tax deduction of up to ₹1 lakh on expenses incurred for the treatment of specified diseases and critical illnesses, such as cancer, kidney failure, neurological diseases (like dementia and Parkinson’s disease), thalassemia and AIDS, among others.
Deductions on Interest Received (Section 80TTB)

Senior citizens are eligible for a tax deduction of up to ₹50,000 on interest received from savings accounts, fixed deposits and recurring deposits.
Standard Deductions on Pension

Senior citizens receiving pensions are eligible for a standard deduction of ₹50,000 under the Old Tax Regime and ₹75,000 under the New Tax Regime.
Relief from Advance Tax Payment

According to Section 208, resident senior citizens who do not earn income from a business or profession are exempted from paying advance tax. They are just required to pay the Self-Assessment Tax before filing the return.
Tax Benefits on the TDS

With higher TDS thresholds, senior citizens can avoid unnecessary TDS deduction on income earned from interest (subject to certain conditions). For this, they must submit Form 15H under Section 197A of the Income Tax Act.
Exemption on Reverse Mortgage Gains

A reverse mortgage is a concept that allows a senior citizen to mortgage their owned accommodation to a bank or financial institution. In this case, instead of paying EMIs, they receive periodic payouts or a lump sum from the bank.

These regular payouts are considered “loan” rather than “income”, and hence are fully exempt from tax.
Relief from Online Income Tax filing for Super Senior Citizens

Super senior citizens are exempt from the mandatory e-filing of ITR. They can file their income tax return manually using physical paper forms (ITR-1 and ITR-4).

Conclusion

The Income Tax Act provides various special provisions to reduce taxes for senior citizens. Apart from providing financial protection, senior citizen medical insurance policies help you to avail various tax benefits. Hence, if you are a senior citizen or have a senior citizen parent, buying health insurance for them can be beneficial in multiple ways.

Frequently Asked Questions (FAQs)

Q. What is the income tax exemption limit for senior citizens?

Ans: Under the old tax regime, the basic income tax exemption limit is ₹3 lakh for senior citizens and ₹5 lakh for super senior citizens (people aged 80 and above). Under the new tax regime, there is a basic exemption limit of ₹4 lakh for all individuals, irrespective of age.
Q. Are all senior citizen tax benefits that were available in the old tax regime available in the new tax regime?

Ans: No, not all tax deductions for senior citizens are available in the new tax regime. For instance, Sections 80D, 80DDB and 80TTB are applicable only in the old tax regime. However, senior citizens can still claim some benefits, such as a standard deduction on pension from the former employer, under the new tax regime.
Q. Can senior citizens claim tax benefits on fixed deposits?

Ans: Yes, senior citizens can claim tax deductions up to ₹50,000 under Section 80TTB for interest earned on fixed deposits. This limit also includes interest income from savings accounts and recurring deposits; however, it is available only in the old tax regime.
Q. Can senior citizens claim tax deductions if they do not earn a salary?

Ans: Yes, senior citizens can claim tax deductions even if they do not earn a salary. Even without earning a regular income from a salary, retired senior citizens may have tax liability from income from pensions, rents and interest earned on deposits.
By claiming deductions against these incomes, senior citizens can lower their tax liability or claim a tax refund. Senior citizens can claim deductions under Section 80D, 80TTB and standard deductions on the pension received from a former employer.
Q. What are the deductions allowed for senior citizens in the new tax regime?

Ans: While the New Tax Regime allows only limited deductions, senior citizens can claim a standard deduction of up to ₹75,000 on income from salary or pension.

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Disclaimer: The list mentioned is according to the alphabetical order of the insurance companies. Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. For complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website www.irdai.gov.in

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*We will respond in the first instance within 30 minutes of the customers contacting us. 30-minute claim support service is for the purpose of giving reasonable assistance to the policyholder in pursuance of the claim. Settlement of claim (including cashless claim) is the responsibility of the insurer as per policy terms and conditions. The 30- minute claim support is subject to our operations not being impacted by a system failure or force majeure event or for reasons beyond our control. For further details, 24x7 Claims Support Helpline can be reached out at 1800-258-5881.

*Product information is authentic and solely based on the information received from the Insurer. Policybazaar is acting only as a facilitator and claims settlement shall be at the sole discretion of the Insurer. Policybazaar does not provide any medical or surgical advice or diagnosis and is not responsible for your interactions / treatment by a medical practitioner/hospital. Please consult a registered medical practitioner for any medical or surgical advice. The Information that you obtain or receive from Policybazaar, and its employees, or otherwise on the Website is for informational purposes only. As per the Insurance guidelines, you are allowed to cancel the policy with-in 30 days from the date of Issuance of policy.This option is available incase of policies with a term of one year or more.

*All the health insurance plans cover hospitalization expenses including COVID-19 treatment cover up to the specified limits. You can also buy specific COVID-19 health insurance policies such as Corona Kavach Policy and Corona Rakshak policy.

**All savings and online discounts are provided by insurers as per IRDAI approved insurance plans. #Tax Benefits are subject to changes in tax laws.

*₹1748/month is the starting price for a 1 crore health insurance for an 18-year-old male, with no pre-existing diseases. Discount on renewal premium is subject to the number of wellness points earned in the health insurance policy. For more details about the plans, please read the sale brochure carefully to get upto 100% discount on renewal premium.

*₹400/month is the starting price for ₹ 5 lakh Health insurance for a 30 year old male & 29 years old female, living in Delhi with no pre-existing diseases

*₹541/month is the starting price for ₹ 10 lakh Health insurance for a 30 year old male & 29 years old female, living in Delhi with no pre-existing diseases

*₹762/month is the starting price for ₹ 1 Crore Health insurance for a 30 year old male & 29 years old female, living in Delhi with no pre-existing diseases

*₹243/month(₹ 8/day) is the starting price for a 5 lakh health insurance for a 20-year-old male, non-smoker, living in Bengaluru with no pre-existing diseases

*₹2020/month is the starting price for ₹ 1 Cr Health insurance for a 50 year old male & 50 years old female, living in Bangalore with no pre-existing diseases rounded off to nearest 10.

*₹390/month (₹13 per day) is starting price for 1 cr. Health insurance for 25 years old male, with pre-existing diseases, residing from tier 1 city rounded off to the nearest 10.

*No medical tests are required unless requested by the insurer’s underwriter. In-case of pre-existing diseases relevant medical proof would be required as per the terms and condition of the policy opted.

*The values taken for effective cost calculation are indicative values and may change as per the selected plan.

*Coverage upto double the amount of Sum Insured is available on certain covers for a minimum plan of Rs. 5 Lakh on the first claim only to an individual of upto 45 years of age with no pre-existing diseases. The benefit is available with or without extra cost depending on the plan chosen.

*Coverage of pre-existing diseases is provided by insurer as per their underwriting policy.

*The scope of coverage may vary from plan to plan.

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Tax Benefits are subject to changes in tax laws. For more details on risk factors, terms and conditions, please read the sales brochure and applicable rules and regulation carefully before concluding a sale.

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10 Special Tax Benefits for Senior Citizens

Who is a Senior Citizen?

Special Tax Benefits for Senior Citizens

Higher Basic Exemption Limit

Higher Deductions for Health Insurance (Section 80D)

Tax Deductions on Medical Expenses (Section 80D)

Higher Deductions for Specific Disease Treatment ( Section 80DDB)

Deductions on Interest Received (Section 80TTB)

Standard Deductions on Pension

Relief from Advance Tax Payment

Tax Benefits on the TDS

Exemption on Reverse Mortgage Gains

Relief from Online Income Tax filing for Super Senior Citizens