Income Tax Relief To Senior Citizens

New income tax benefits for senior citizens F. Y. 2018-19:

*1. Rs 50,000 Tax exemption on Interest Income from Fixed Deposits and Recurring Deposits u/s 80TTB:*

The interest rates had come down drastically in last few years and most senior citizens depend on fixed deposits for their regular income. The tax exemption of Rs 50,000/- interest income from Post office or Banks under section 80TTB is good move to compensate for the same. However if you take benefit u/s 80TTB then you cannot claim tax benefit on interest received on savings bank account u/s 80TTA. This will lead to saving of Rs 2,600 for 5% tax slab, Rs 10,400 for 20% tax slab and Rs 15,600 for 30% tax slab.

*2. Standard Deduction for Pensioners:*

Budget 2018 has introduced *standard deduction of Rs 40,000 for both salaried and pensioners*. For salaried this is not much beneficial as medical reimbursement and transport allowance have been abolished. But as pensioners did not have these allowances, Rs 40,000 is straight deduction for them!

*3. Medical Insurance premium exemption increased u/s 80D:*

The Medical Insurance premium and the preventive health check-up limit for senior citizens under section 80D has been *increased from Rs 30,000 to Rs 50,000.*

*4. Deduction for Medical treatment of critical illnesses increased u/s 80DDB:*

The deduction for medical *treatment of specified critical illnesses have been increased to Rs 1 Lakh.* Earlier the limit was Rs 60,000 for senior citizens and Rs 80,000 for very senior citizens.

*Following illness are covered under section 80DDB:*

Neurological DiseasesParkinson’s DiseaseMalignant Cancers, AIDS, Chronic Renal FAILURE, HAEMOPHILIA, THALASSAEMIA.

*5. Interest TDS threshold raised to Rs 50,000 u/s 194A*

There is TDS (tax deduction at source) for almost all kind of income. However *as a relief to senior citizens Budget 2018 has raised the limit for TDS from Rs 10,000 to Rs 50,000.* So TDS would only be applicable for senior citizens if the annual interest income from a bank/post office is more than Rs 50,000.

🙏  *Discuss with your Tax Advisor before you proceed and act* 🙏