Tax Planning for Senior Citizens (A.Y. 2015-16 and A.Y. 2014-15)

Tax Planning for  Senior Citizens A.Y. 2015-16 and A.Y. 2014-15: 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 65 years. Some of the tax planning tips for senior citizens is as follows:

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What is the maximum age of Senior Citizens & Very Senior Citizens?

The age limit for a senior citizen is 60 years or more for A.Y. 2014-15 & 2015-16. The age limit for very senior citizens is 80 years or more for A.Y. 2014-15 & 2015.16.

Tax Planning Tips for Senior Citizens

Basic 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.2015-16) Rs.2,50,000 (A.Y. 2014-15). 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.

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

Gifts and Investments

When people belonging to the senior citizen group want to gift certain objects or want to invest in some kind of investment policies, the same is also exempted from the purview of taxation. Additionally, the Senior Citizen’s Savings Scheme also offers about 9% interest rate per annum.

Investment in PPF

Public Provident Funds or the PPF are also very attractive source of investment for senior citizens as it allows an exemption upto Rs. 1,50,000 (A.Y.2015-16), Rs. 1,00,000 (A.Y. 2014-15) for all citizens of India. Even if one has exhausted their own accounts, they can simply use their parents account to channelize more funds into the same section through investment by senior citizens.

Capital Gains

Capital Gains are also an exclusive area for senior citizens. The short term capital gains will be tax free if the basic threshold limit of 15% is not crossed.

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. 20, 000 (only for senior citizens) when they invest in medical policies under the section 80 D. Additionally, they can also avail the opportunities for showing tuition fee expenses along with other forms of medical investment to further enhance their deduction section.

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

Post Office Savings

It is also the best tax saving scheme for senior citizen’s tax planning. Post Office Savings can really be a cunning way out in a situation where a person has exhausted most of their available options. The scheme offers an interest rate of 8% per annum along with a 10% bonus after six years of maturity. The maximum permissible limit for investment is Rs. 3,00,000 for individuals and Rs. 6,00,000 for a joint account. Section 80L allows a tax free interest up to Rs. 12, 000 per annum in such respect.

There are also numerous other options for “Tax Planning for  Senior Citizens A.Y. 2015-16 and A.Y. 2014-15” 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.6,70,000, senior citizens is not liable to pay tax for A.y. 2013-14!

Yes it is true, if you are senior citizen then you don’t need to pay tax on income up to Rs.5,20,000. Follow the following guidelines.

  1. Deduction can be claim up to Rs. 2,00,000 (A.Y.2015-16) Rs. 1,50,000 (A.Y.2014-15) 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. 20,000/-

Total deduction is equal to 370000/-

Income – Deduction i.e. 6,70,000 – 3,70,000 = 3,00,000 (Basic exemption), So tax will be NIL

If don’t have housing loan then senior citizen don’t need to pay tax on income of  Rs. 4,70,000/- after claiming deduction u/s 80C and 80D.

So, if you have any queries regarding “Tax Planning for  Senior Citizens A.Y. 2015-16 and A.Y. 2014-15” then comment. We will reply as soon as possible.

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  1. Sr.citizen having no buisness income may pay his income tax in the month of july 3013 before submitting income tax return? pls. clarify.

    • What the query, seen to have so far remained unanswered, refers to is the payment by way of self-assessment. But, what is not to be oversighted is the other requirement of ‘advance tax’ should that apply to a given case.

  2. My Grandfather is State Government Employee and he will be retired on 31st March’13 on account of completion of 60 years on 10th march’13

    My Question is: Senior Citizenship rebate will be allowed or not for the FY 2012-13 ?

    Pls Help

    • Rebate will be allowed for FY 2013-14 only. I am also a retired person, retired several years back and had to clarify this point about the eligibility from which year.

    • sr. citizenship rebate will be applicable even if he completes his age of 60 yrs. on 31st march 2013 .

    • SURE – Your Grand Father is Valid to Get Rebate of Senior Citizen for F.Y 2012-13. He completed his 60 in this financial year so Valid.

  3. The short term capital gains will be tax free if the basic threshold limit of 15% is not crossed.This is not well understood.

  4. The 5.2 Lakhs threshold sounds like a joke.Can’t imagine a Senior Citizen stil refunding his Housing Loan!! 80D limit 15000 or 20000? Writeup says 15000, example says 20000.

  5. Is the interesdt earned from post office monthly income scheme upto 12,000 rupees exempt from income tax as mentioned in your article ? Please confirm whether this is a fact.

  6. I think now for availing deduction of Rs 100000/- one can invest the entire amount in PPF under sec80C as against Rs 70000/- earlier. Is this true?

  7. I am a senior citizen and house wife. Most of my income is from Fixed Deposits. My total income before allowing deductions wont cross 2,50,000(excluding dividend income and long term capital gains on shares). There is never a short term capital gain. Do I need to file returns?

    • Yes, any person with income other than salary income + Savings bank interest is liable to file income tax return, even though there is no tax liability. Any one with FD interest income or long term capital gain have to file income tax return even though there is no tax liability because the interest income is less than 2,50,000 for a senior citizen. Best to consult a chartered accountant.

  8. Total interest income from Babnks and MIS (Poast Office)
    is Rs.4,40,000/- per year. I am retired from Service on supernnuation (60 years) what would be my tax liability for
    the AY 2013-14. I am getting full medical reimbursement from
    my employer i.e. BHEl. and hence I have no mediclaim.
    I do not have reental income too. Only interest income as
    shown above. Do I need to file I.T.return at all.

  9. i am 80 yrs old.I have sold my house and staying with my son.i want to gift the sale proceeds to my son as i want to help him in purchase of house.whether i am liable to any capital gain tax

  10. Hello, thanks nice article. I pay fee
    to my accountant to manage my tax affairs. Is this deductible? Also are any
    repairs to self-occupied house property claimable?

  11. hi, my age is 80 years and few months. my tenant wants to submit HRA claim at his office and asked for my PAN number. i hope as i’m above 80 (super senior citizen), i don’t have to share my PAN number. Rent is Rs.17,000 per month. In such case, a declaration can be given by me to my tenant. hope i’m correct. please let me know and the correct declaration form. Thank you.

  12. i m a 71 year sr citizen lady having income from various sources like rent income and income from bank interest and so plan to give loan.

  13. My father in law expired in Dec 2013 he was of the age of 92 , his wife was not an earning member and as such she is 82 years , now after his death all the investments have been transfered on her name and she earns interest on the same . She would need to start filing her returns so what is the benifits she can claim.

  14. my father in law just retired. he will get 23000/month pension and got 20 lakhs. if he make fd of 20lakhs he will get 180000 as interest so he will accumulate 456000. what will be the income tax figure. he dont have hbl. only sbi life of 20000/ann

  15. I am a senior citizen I want to make payment tax for 2014-2015 which will ending 31st march 2015. through
    net banking. pl guide which form use A.Y 2015-2016 CORRECT OR NOT .ADVANCE PAYMENT OR NOT

  16. i am a senior citizen having age 63 and my pension + interest on fixed deposit will be around 600000(6 lac).
    I know I can save tax upto 5 lac (3 lac exemption and 2 lac investment).So i have to pay tax on 1 lac i.e 10000.Kindly tell me last date to pay this tax for AY 2015-2016.

  17. I am a working senior citizen. I come under the highest income tax bracket. since investment in NPS for the purpose of tax saving is available only upto the age of 60years , how do I avail of the additional Rs 50000 deduction apart from Rs 150000 in PPF?

  18. I am a senior citizen :
    Pension income : Rs1.88,000 , FD interest + bank interest comes to Rs 3.20,000/-.
    do i get any benefit under section 80 C as PPF invested 1.00 L , SCSS scheme

    Please guide

  19. I am a senior citizen having age 78 and my pension + interest on fixed deposit will be around 600000(6 lac).
    Kindly tell me know the tax to be paid considering deduction under section 80 C if applicable. for AY 2014-15.
    what would be the deduction amount and under which section

    regards & Thanks

  20. Senior citizenship rebate for f.y.2015-16 (a.y.2016*17) will be applicable even if I complete my age of 60 yrs. on 12th September 2015.