Taxpayers, particularly senior residents can decide the brand new tax regime for FY 2022-2023 or stick with the prevailing system. From AY 2022–23, aged individuals who’re 75 years of age or older and solely obtain pension earnings and curiosity earnings from the account(s) they preserve with a financial institution are exempt from submitting ITRs. For senior residents of 60 to below 80 years of age, the usual exemption ceiling is ready at Rs. 3 lakhs, whereas tremendous senior residents above 80 are exempt as much as Rs. 5 lakhs per fiscal yr. There are different choices for taxpayers to decrease their earnings taxes, nevertheless, nearly all of taxpayers are conscious of the ₹1.5 lakh deduction permitted below Section 80C. According to an interview with Dr. Suresh Surana, Founder, RSM India, here is how senior residents could make tax-saving investments aside from part 80C, to cut back their tax burden.
Dr. Suresh Surana stated other than the advantage of deductions which may be claimed u/s 80C of the Income Tax Act, 1961 (hereinafter known as ‘the IT Act’), each Senior Citizen could take into account the next tax planning options or instruments:
1. Contribute in the direction of National Pension Scheme (NPS) for claiming an extra deduction of Rs. 50,000 u/s 80CCD(1B)
The Pension Fund Regulatory And Development Authority elevated the Maximum age for becoming a member of NPS to 65 years and accordingly a person aged between 60 to 65 years may also be a part of NPS and proceed upto the age of 70 years in NPS. Such senior residents could not solely declare a deduction of the contribution made to such NPS u/s 80C throughout the total cumulative restrict of Rs. 150,000 p.a. but additionally declare an extra deduction u/s 80CCD(1B) of upto Rs. 50,000 in a Financial Year which is over and above the mixed deduction of Rs, 1,50,000 p.a.
2. Availing deduction w.r.t. Medical Insurance Premium
In accordance with the provisions of Section 80D of the IT Act, Resident Senior Citizens could avail the next deduction of upto Rs. 50,000 for fee of premium in the direction of the medical insurance coverage coverage. Further, Senior Citizens above the age of 60 years who will not be coated by Health Insurance, are to be allowed a deduction of Rs. 50,000 in the direction of precise medical expenditure.
Senior Citizens may take into account claiming deduction (as shall be related) w.r.t. to the next:1. Deduction in respect of medical therapy of specified ailments
Section 80DDB of the IT Act gives resident particular person taxpayers to assert a deduction for quantity truly paid for the medical therapy of specified illness (corresponding to dementia, Parkinson, malignant cancers, and so on.) for such taxpayer himself or a dependent relative (partner, kids, mother and father, brothers and sisters). Such deduction in a monetary yr is on the market to senior residents and can be restricted to the quantity of precise expenditure incurred or Rs. 1,00,000, whichever is decrease and can be allowed solely in circumstances the place the desired illness has been licensed by the requisite medical authority as prescribed. Further, it’s pertinent to notice that any insurance coverage declare acquired by such senior residents needs to be lowered from the quantity of declare of deduction.
2. Deduction in case of an individual with incapacity
With growing age, senior residents tend to undergo from numerous ailments and will undergo incapacity on account of the identical. Such senior residents affected by specified incapacity could avail a flat deduction each year of Rs. 75,000 for regular incapacity and Rs. 1,25,000 for extreme incapacity primarily based on the extent of incapacity licensed by the medical practitioner.
3. Donation to Charitable Organisation or Institution
Senior residents could are likely to make donations for charitable functions. However, donations made to accepted charitable establishments may be claimed as deductions u/s 80G of the IT Act. An indicative listing of such accepted establishments could embrace PM National Relief Fund, National Defence Fund, Fund for Army, registered Public Charitable Trusts, and so on. Such deduction can be allowed for 50% or 100% of the donation made (with or with out qualifying limits) relying on the organisation/ establishment to which such donation is made.
4. Deduction w.r.t. sure Interest Income
Senior residents could declare deduction u/s 80TTB of the IT Act in respect of curiosity on deposits with a banking firm, cooperative society and Post workplace for upto Rs. 50,000 in a selected monetary yr. It is pertinent to notice that such deduction is on the market to senior residents not solely with respect to financial savings account curiosity but additionally for curiosity on mounted deposits.
Apart from the above, Section 194P of the Income Tax Act, 1961 gives resident Senior Citizens aged 75 years exemption from submitting earnings tax returns supplied such Senior Citizen has pension earnings and curiosity earnings solely & curiosity earnings accrued / earned from the identical specified financial institution during which he’s receiving his pension.
Disclaimer: The views and proposals made above are these of particular person analysts or broking firms, and never of Mint.
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