Senior citizens can claim to save tax under certain provisions of income tax. They will get this benefit from savings to the treatment of serious diseases.
ways to save tax
Tax is collected from every citizen of the country falling within a fixed slab by the Income Tax Department. Through this, the government’s treasury is filled, but under the Income Tax Act, some exemptions are also given to other people including senior citizens. In such a situation, people whose age is 60 years or more, they can get tax exemption by adopting special methods.
Interest can be tax free in FD
Although TDS is deducted on the interest earned in bank FD, but there is a provision of exemption from TDS if the annual interest income from bank FD is within the limit of Rs 40000. Apart from this, senior citizens also get exemption in this. Senior citizens can get interest exemption up to Rs 50000 in a financial year in FDs made in post offices and co-operative banks. For this, a claim has to be made under section 80TTB.
Rebate on up to 50 thousand in RD also
Senior citizens can also get the benefit of tax rebate on interest on Recurring Deposit (RD). TDS will not be deducted on interest income up to Rs 50000 from RD to senior citizens. This rule has been implemented from April 2019.
Get discount on post office savings account
Under section 10(15)(i) of the Income Tax Act, senior citizens can get tax exemption in the savings account of the post office. Tax exemption is available on interest income up to Rs 3500 in case of single account holder and up to Rs 7000 in case of joint account. At the same time, tax can be saved in the income earned on interest. For this, deduction can be claimed on it under section 80TTB of the Income Tax Act. However, this benefit is applicable to the limit of Rs 50000 interest earned in a financial year.
Save tax on health insurance premium
Individuals above 60 years of age can claim deduction under section 80D of the Income Tax Act on payment of health insurance premium. The deduction limit is Rs 50,000 and the maximum is Rs 1 lakh. However, the premium was not paid in cash for its benefit.
Benefit in the treatment of serious diseases
If senior citizens are suffering from selected serious diseases like cancer, motor neuron disease, AIDS etc., then they can also get the benefit of tax exemption on its treatment. Expenses up to Rs 1 lakh within a financial year are tax free. For this, you can claim tax deduction under section 80DDB of the Income Tax Act, up to a maximum of Rs 40,000 for the expenses incurred on the treatment of serious diseases.
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