Tax laws are usually very friendly towards senior citizens and many benefits have been provided under the Income Tax Act to the senior citizen
My birth date is 15-09-1958, hence I became senior citizen for the financial year - FY 2018-2019. Please let me know the benefits - which I can get as a senior citizen from April 1, 2018. Please let me know the amount of TDS from this year FY 2018-2019. (Last year it was Rs 10,000). Please advise if the interest earned on Equity Linked Savings Scheme is tax free . When shall I get the interest on ELSS?
– Vidya Inamdar
You shall be qualified as a senior citizen starting from Financial Year 2018-19 for tax purposes. Tax laws are usually very friendly towards senior citizens and many benefits have been provided under the Income Tax Act to the senior citizen. For instance, the basic exemption limit is higher for seniors as compared to other individuals, tax exemption limit on interest income from bank savings deposits, FD, RD and post office schemes is Rs 50,000 which is Rs 10,000 for others. Hence no tax will have to be deducted at source (TDS) under Section 194A, upto this threshold of income. Moreover, you would not be required to file Form 15H, to prevent deduction of tax at source if you have income less than this amount. Furthermore, the deduction limit on health insurance premium is Rs 50,000 under Section 80D and the deduction of medical expenditure for specific critical illnesses is Rs 1 lakh for all seniors, under Section 80DDB for the financial year 2018-19. Long Term Capital Gain (LTCG) on ELSS, which come with a mandatory lock-in period of three years used to be tax free. However, after the re-introduction of LTCG tax in the budget, the same shall be liable to tax. LTCG from equity mutual funds over Rs 1 lakh would be taxed at 10% without any indexation benefit. Nature and time of returns from ELSS vary from scheme to scheme. They are, however, tax free in the hands of the shareholder.
I was supposed to get a tax refund this year. But I got a letter saying it will be set off against some other year's tax. How is this possible?
– Ravi Kundnani
As per Section 245 of the Income Tax Act, where a refund is found due to a person, the Income Tax Officers may in lieu of refund, set off the amount to be refunded against any sum remaining payable under the Act, after giving intimation in writing to such person. Thus, the action of the department is valid in law.
The writer is director, Nangia Advisors LLP
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