4 income tax exemptions senior citizens can avail to reduce deductions in income earned

Individuals above 60 years of age i.e. Senior Citizens enjoy special tax breaks under the Income Tax Act rules given there are limited sources of income in the silver years.

Senior citizens must know these income tax benefits to reduce the outgoing tax. (Image: PTI)

Income Tax: Individuals above 60 years of age i.e. Senior Citizens enjoy special tax breaks under the Income Tax Act rules given there are limited sources of income in the silver years. While time to file your Income Tax Returns (ITRs) for the financial year 2018-19 is coming closer, Senior Citizens or people filing IT returns on their behalf must know these income tax benefits to reduce the outgoing tax. No TDS on Interest up to Rs. 50,000 In December 2018, the Central Board of Direct Taxes issued a notification to the banks stating that no TDS will be deducted if the interest income for Senior Citizens is limited to Rs.50,000 for the financial year. This tax break applies to interest earned from Fixed Deposits in banks, post offices, co-operative societies, etc. This deduction is over and above the exemption of income from interest on savings account up to Rs.10,000. Standard Deduction of Rs. 40,000 on Pension Finance Minister Arun Jaitley re-introduced Standard Deduction of Rs.40,000 in Budget 2018. Senior Citizens can claim Standard Deduction from their Pension earned from annuity aka retirement plans. Additional Deduction up to Rs. 50,000 on Medical Insurance With the ever rising medical treatment cost, it is prudent to buy a medical insurance cover. However, with age, the premiums of health insurance plans also soar. Keeping this in view, a dedication of up to Rs. 50,000 can be claimed for Medical Insurance for Senior Citizens. If an individual pays for the medical insurance premium for parents (dependent/or not), s/he too can claim this from his taxable income over and above Rs. 25,000 s/he can claim for medicover for self, spouse and children. Tax Exemption up to Rs. 1,00,000 under Critical Care Medical expenses incurred on the treatment of critical diseases for dependent parents can also be claimed for tax exemption. Expenditure up to Rs.1,00,000 is exempted from taxable income in a given financial year.