43.  Tax Planning Tips @ Seniour Citizens for A.Y. 2014-15

Tax Planning for  Senior Citizens 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: 

Maximum Age of Senior Citizen ?The age limit for a senior citizen is 65 years or more for A.Y. 2012-13 and 60 years or more for A.Y.2013-14 to calculate deduction u/s 80D and u/s 80DDB. Also, for the purpose of furnishing a declaration in Form 15H, the age limit for a senior citzen is 65 years or more up to 30.06.2012 and 60 years or more w.e.f. 1.7.2012.The new category i.e. very senior citizens has been created for A.Y. 2012-13 who has age more than 80 years. They can claim higher basic exemption limit for Rs. 5,00,000.

 

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.2,50,000 per year. 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.

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 `70, 000 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 ` 15,000 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.

 
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