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Issues in Annual Return & Audit under GST
January, 08th 2019

If you are a senior citizen, there are some benefits available to you and to the very senior citizens under the income tax laws.

Income Tax Returns filing season is here! Yes, the tax filing season is approaching and many of you must have prepared for it well in advance. Others may not have even started! You may have made investments to save taxes on your hard earned money. And if you are a senior citizen, there are some benefits available to you and to the very senior citizens under the income tax laws. Those who are aware of it, avail the benefit but those who are not aware of the rules, here's is a brief guide for you:

1. Income tax returns filing: What are the tax rate benefits available?
Senior citizens and very senior citizen are granted a higher exemption limit as compared to other taxpayers. Exemption limit is the quantum of income up to which a person is not liable to pay tax. The exemption limit granted to senior citizen and very senior citizen for the financial year 2018-19 is as follows :

Senior citizen (60 to 80 years): A senior citizen is granted a higher exemption limit compared to non-senior citizens. The exemption limit for the financial year 2018-19 available to a resident senior citizen is Rs 3,00,000. The exemption limit for the non-senior citizen is Rs 2,50,000. Thus, it can be observed that an additional benefit of Rs 50,000 in the form of higher exemption limit is available to a resident senior citizen as compared to normal taxpayers.

Very senior citizen (80 years and above): A very senior citizen is granted a higher exemption limit compared to others. The exemption limit for the financial year 2018-19 available to a resident very senior citizen is Rs 5,00,000. The exemption limit for the non-senior citizen is Rs 2,50,000. Thus, it can be observed that an additional benefit of Rs 2,50,000 in the form of higher exemption limit is available to a resident very senior citizen as compared to normal taxpayers.

2. Is there any special benefit available under the Income tax return law to senior citizens?
Yes, the Income-tax Law very well takes care of the senior citizens of the nation by offering them several tax benefits. In this part, you can gain knowledge of various benefits offered by the Income-tax Law to senior citizens.

3. Is a very senior citizen granted exemption from e-filing of the income tax return?
From the assessment year 2018-19 onwards any taxpayer filing return of income in Form ITR 1/4 and having a refund claim in the return or having a total income of more than Rs 5,00,000 is required to furnish the return of income electronically with or without digital signature or by using electronic verification code. However, Income-tax Law grants relaxation from e-filing in the above case to very senior citizen.

In other words, a very senior citizen filing his return of income in Form ITR 1/4 and having a total income of more than Rs 5,00,000 or having a refund claim can file his return of income in paper mode, i.e., for him, e filing of ITR 1/4 (as the case may be) is not mandatory. However, he may go for e-filing if he wishes.

4. Is a Resident senior citizen granted exemption from payment of advance tax?
As per section 208, every person whose estimated tax liability for the year is Rs 10,000 or more, shall pay his tax in advance, in the form of "advance tax". However, section 207 gives relief from payment of advance tax to a resident senior citizen. As per section 207 a resident senior citizen (i.e., an individual of the age of 60 years or above during the relevant financial year) not having any income from business or profession, is not liable to pay advance tax.

5. What are the income tax benefits available on interest on deposits?
Section 80TTB of the Income Tax law gives provisions relating to tax benefits available on account of interest income from deposits with banks or post office or co-operative banks of an amount up to Rs 50,000 earned by the senior citizen (i.e., an individual of the age of 60 years or above). Interest earned on saving deposits and fixed deposit, both shall be eligible for deduction under this provision.

Section 194A of the Income Tax law gives corresponding provisions that no tax shall be deducted at source from payment of interest to a senior citizen up to Rs 50,000.

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