Tax Planning for  Senior Citizens A.Y. 2017-18 and F.Y. 2016-17: 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?

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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.

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]