In India, the bulk of Senior Citizen faces financial hardship in adulthood as most of them aren’t during a position to earn their livelihood. Their savings, if any, aren’t enough to satisfy their day to day, particularly the medical expenses. Senior Citizen with good net-worth value is in search of excellent short-term financial getting to earn an honest income from their finance. The tax law provides various benefits to senior citizens in India with the view to mitigating their issues.
Who is taken into account an oldster in India?
According to the law, an oldster is an individual resident between the age bracket of 60 to 80 years, as on the Judgment Day of the previous fiscal year.
Who is taken into account as an excellent oldster in India?
A super Senior Citizen is a private resident who is above 80 years, as on the Judgment Day of the previous fiscal year.
Just because an oldster has been filing an ITR all his life doesn’t necessarily mean that he/she is mandatorily required to file an ITR. Repeatedly, senior citizens continue filing their ITR’s even once they aren’t required by law. this might happen thanks to misinformation, fear of tax penalties, lack of data etc. Given below are certain situations where an oldster won’t be required to file their ITR.
No taxable income after turning 60
The basic tax exemption limit for normal citizens below 60 years aged is Rs 2.5 lakh during a financial year. Except for Senior Citizens, the exemption limit is Rs 3 lakh, while for Very Senior Citizens, the limit is Rs 5 lakh.
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So, an oldster doesn’t need to pay any tax or file ITR just in case the annual income is up to Rs 3 lakh and no TDS is deducted during the fiscal year. Similarly, a real oldster is exempted from paying tax and filing ITR if his/her annual income is up to Rs 5 lakh and no TDS is deducted.
Pension is below the exemption limit
Retirement age is that the age at which an individual is predicted or required to cease work and is typically the age at which they’ll be entitled to receive superannuation or other benefits. In India, generally, people retire once they reach the age of 60 to 65 years after which they receive benefits like a pension, which is taxable under the tax.
With a pension, the employer guarantees an income in retirement. Employers are liable for both funding the plan and managing the plan’s investments. But not many employers give an offer to the pensions, but government organizations usually do.
Essentially, on retirement, if the worker opts for commutation of pension, some are paid as a payment to the pensioner while on the balance the pension begins. In simple terms, commutation means a payment in lieu of periodic payments of pension. In such a case, the quantity of pension is going to be less than the quantity of pension with none commutation.
This would cause situations where your pension income falls below the essential exemption limit i.e not taxable and hence not susceptible to file ITR. Therefore, it’s important to recollect that albeit your salary income exceeded the essential exemption limit (making you susceptible to file your ITR), it doesn’t mean that your lower pension also exceeds the limit. Verify if your pension exceeds the essential exemption limit. There are chances that you simply wouldn’t be susceptible to file your ITR just in case they are doing not.
Know the essential Exemption limit for oldster and Super Senior Citizen in India for FY 2019-20 and FY 2020-21
Filing an ITR depends upon the character of income
The ITR form applicable to a taxpayer depends on the sort of taxpayer, whether individuals, HUF, company, etc., the character of income and total income. you’ll not be required to file an ITR if you are doing not have taxable income under the 5 heads of tax. to form an income chargeable, it should be under a minimum of one among the five income heads:
• House Property Income
• Profits or Gains from Business or Profession
• Capital Gains
• Income from other Sources
For instance, suppose Mr A had properties from which he was earning rent. an equivalent was taxable under the top ‘Income from House Property’. Mr A had no other source of income. within the current year, Mr A sold all his properties and was susceptible to pay capitals gains tax. He will file ITR within the current year declaring income under the top ‘Capital Gains’ and Income from House Property.’
However, from the next year as Mr A will haven’t any properties and thus no taxable income. Therefore, he won’t be susceptible to file his ITR.
Senior citizens also receive a variety of other benefits under tax Provisions such as:
• Deduction under Section 80TTB of Interest-free Income
• Additional Deduction under Section 80D
• Additional Deduction under Section 80DDB
• Senior citizens are free from the burden of paying advance tax unless they create income under the top ‘Profits and Gains from Business or Profession’.
• Super Senior Citizens (individuals above 80 years) can file for his or her tax Return through either ITR-1 (Sahaj) or ITR-4 (Sugam). they will prefer to roll in the hay either manually or electronically, while no other assessee can file Offline Returns.
Thanks to attractive tax deductions and benefits, the tax law has provided an advantageous position for senior citizens in India.
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