Tax Planning for Senior Citizens (A.Y. 2016-17 and A.Y. 2015-16)

Tax Planning for  Senior Citizens A.Y. 2016-17 and A.Y. 2015-16: The category of senior citizens has been under the purview of income tax from a very long time. However, there has been certain relief that has been provided to them when it comes to imposing taxes on their income. A person is regarded as a senior citizen if the person is above the age of 60 years. Some of the tax planning tips for senior citizens is as follows:

Maximum Age Limit of Senior Citizens & Very Senior Citizens?

The age limit for a senior citizen is 60 years or more for A.Y. 2016-17 & 2015-16. The age limit for very senior citizens is 80 years or more for A.Y. 2016-17 & 2015.16.

Basic Exemption Limit

When it comes to determining the basic limit for computing tax liability, the senior citizen section enjoys a freedom upto Rs. 3,00, 000 per year (A.Y.2016-17) and same for A.Y. 2015-16. Any income which is within the prescribed limit shall necessarily be exempted from the purview of taxation. A very senior citizens can claim up to Rs. 5,00,000.

Senior citizens (60 years or above) not having any income from business or profession shall not be liable to pay advance tax.

For more information go to: Computation of taxable Income and tax payable for individuals

Permissible Deductions

  • Investments: Deduction in respect of life insurance premium, provident funds, repayment of housing loan etc. up to a maximum of Rs.1,50,000/-[Sec. 80C].
  • Additional deduction of Rs. 50,000 (maximum) for contribution to notified Pension Scheme.
  • Investment in health policies: Just like the benefits which accrue to the ordinary residents, even senior citizens are entitled to receive a deduction of Rs. 30, 000 (only for senior citizens) (A.Y.2016-17)/ Rs.20,000 (A.Y.2015-16). When they invest in medical policies under the section 80D. Check complete detail about deduction under section 80D (mediclaim)
  • One more deduction related to mediclaim added from A.Y.2016-17 i.e. expenditure on medical treatment of resident very senior citizen (80 years or above) not having medical insurance cover, shall also be deductible within the aforesaid limit of Rs.30,000. [w.e.f. 1.4.2016 A.Y.2016-17]

Check all income tax deduction from Gross Total Income

Apart from this, see articles on tax planning  and how to save tax?

There are also numerous other options for “Tax Planning for  Senior Citizens A.Y. 2016-17 and A.Y. 2015-16” that can be conceived and cleverly implemented such that the seniors can avail the maximum tax benefit and end up with as lesser tax liability as possible. But it should be remembered that no unfair means should be used while framing a valid tax planning session else the same case then might turn into a case of tax evasion. Make your decisions wise and thoughts wiser because after all whatever you pay to the Government in form of taxes are ultimately spend on your benefits and comfort.

On Income of Rs.7,60,000, senior citizens is not liable to pay tax planning.

Yes it is true, if you are senior citizen then you don’t need to pay tax on income up to Rs.7,60,000. But it is possible only by proper tax planning.

  1. Loss can be claim up to Rs. 2,00,000 (A.Y.2016-17) for housing loan (self occupied property)
  2. deduction u/s 80 C of LIC, PPF and other tax saving schemes – 1,50,000/-
  3. Deduction of medical insurance u/s 80 D – Rs. 30,000/- (A.Y.2016-17)
  4. Deduction u/s 80CCB (1B) Rs.50,000/- (New Pension Scheme)
  5. Deduction u/s 80TTA (Saving A/c Interest) Rs. 10,000/-

Total deduction is equal to Rs. 4,40,000/- 

Gross Total Income (7,60,000) – Total Deduction (4,40,000) = Net Taxable Income (3,20,000)

On Net Taxable Income – 3,20,000, tax will be Rs. 2,000, less rebate u/s 87A Rs.2,000 So net income tax payable is NIL. 

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  1. I am a pensioner. I am getting a honorarium of Rs 40 thousand per month.I am saving about Rs one lakh per year and putting that amount in a bank as FD. I am filing IT returns . Some % amount is deducted as TDS from my income.Again Should i pay tax on FD interest also.It may be noted that the savings are from the amount for which I have already paid tax.

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