Income tax returns: Senior citizen with medical insurance, fixed deposits? Check benefits available

Be it banks or the Income-Tax department, all have various facilities available for senior citizen exclusively. For instance, senior citizens have been granted a higher exemption limit on income taxes as compared to normal taxpayers. Not only that, there are various tax benefits available for senior citizens on their investments and expenses as well. According to the department, a senior citizen is defined to be someone whose age is 60 years but less than 80 years during the respective year. A  very senior citizen is someone with an age of 80 years and over. That said, if you have income from other sources and need to file ITR, or have TDS deducted from medical insurance or invested in fixed deposits, then are a number of tax benefits a senior citizen can claim. 

Medical Insurance! 

A senior citizen under section 80D, can claim up to Rs 50,000 tax benefit under section 80D of Income Tax Act. The section is meant for every individual or Hindu Undivided Family, where they can claim tax rebate for their medical insurance which is taken from their total income during any given year. 

However, below 60 years of age, the individual can only avail Rs 25,000 tax benefit. ClearTax in its research note highlights that, an individual can claim a deduction of up to Rs 25,000 for the insurance of self, spouse, and dependent children. An additional deduction for the insurance of parents is available to the extent of Rs 25,000 if they are less than 60 years of age, or Rs 50,000 (as per the Budget 2018) if your parents are aged above 60.

Interestingly, the note mentions that, if both the taxpayer and the parent whom the medical insurance covers have been taken for those aged more than 60 years, the maximum deduction that can be availed under this section is to the extent of Rs.100,000.

(Image source: ClearTax)

Additionally, tax benefit is also allowed for medical treatment of specified diseases under section 80DDB, . For availing this benefit, a taxpayer must be individual or HUF, also an Indian resident. Further, the taxpayer must have spent money on treatment of the dependent. A dependent can be spouse, children parents and siblings. Under this section, a total Rs 60,000 tax benefit is allowed. 

Deposits! 

Under section 80TTB, tax benefits are available on account of interest income from deposits with banks or post office or co-operative banks of an amount upto Rs. 50,000 earned by the senior citizen. Interest earned on saving deposits and fixed deposit, both are eligible for deduction under this provision.

Tax-payers, who are not senior citizens, can avail tax benefit of Rs 10,000 for interest income on savings bank account under Section 80TTA. There is no change for taxpayers less than 60 years of age. 

However, a tax-payer who has taken benefit under Section 80TTB cannot take tax benefit under Section 80TTA as the benefits under Section 80TTB and Section 80TTA are exclusive.

ITR filing! 

For a assessment year, filing return of income in Form ITR 1/4 is mandatory for taxpayers having a refund claim in the return or having total income of more than Rs. 5,00,000. The return of income electronically with or without digital signature or by using electronic verification code. However, there is relaxation from e-filing in above case to very senior citizen.

The department mentions that,  a very senior citizen filing his return of income in Form ITR 1/4 and having total income of more than Rs. 5,00,000 or having a refund claim can file his return of income in paper mode, i.e., for him e filing of ITR 1/4 (as the case may be) is not mandatory. However, he may go for e-filing if he wishes.