Are you a senior citizen? Know your tax liability

Arnav PandyaSenior citizens have the benefit of being able to give Form 15H to various institutions and other places where they would be earning income so as to ensure that there is no tax deduction at source. The question that is important is whether they need to worry about the kind of income that they earn and then look at how they would ensure less tax deduction or is the amount deducted actually good for them. The situation would vary depending upon the position that each person finds themselves in but there are a few points that need to be kept in mind. Here is a way in which the entire issue can be tackled.Overall incomeThe amount that is earned overall during the year is important for the individual because this is the determinant of the total tax to be paid. There is a higher basic exemption limit of Rs 3 lakh that will be available for the senior citizen who are between 60-79 years of age and Rs 5 lakh for those who are above 80 years but the overall level of income that is being earned is important. This will determine whether any of the tax deduction at source will prove to be enough or some additional tax would have to be paid. There are times when the overall income is not very high which would then requiring focusing attention on what needs to be done in order to ensure that unnecessary money does not get locked up. Tax saving investmentsThe manner in which the senior citizen is undertaking their investments also becomes crucial because if there are tax-saving investments that lead to the usage of Section 80C benefit then the overall gains expand. If there are some investments in say the senior citizen savings scheme or the tax saving fixed deposit then this would increase the limit of the income that can be earned before tax starts to kick in. The extent of these investments are also crucial because of the fact that at an older age there might not be too many instruments where the investments would actually be possible given the goals and the requirements.Reconciling the taxThere are times when the senior citizen might want to actually have some tax deducted from their income. This would actually help them because the task on the tax front becomes simpler as the deducted tax would pay for the liability that would arise at the end of the year. In many cases the senior citizen would have to pay the additional tax that has arisen and this can be another task to complete for them. This kind of reconciliation is important because even though there are no requirements to pay advance tax there has to be a settlement of the dues at the end of the year and if there is income then tax has to be paid on it.Return filingMany senior citizens do all the hard work of calculating their income, looking for tax saving instruments and then ensuring that they have no outstanding tax liability but all this comes to nought because they do not file their tax returns. This is the reason why some of them often get a notice from the income tax department about non filing. To complete the entire process it is necessary to file the income tax return before the due date and this would end the matter. Since the working here is simple and all the details are complied with this will not cause any additional requirement o n the part of the senior citizen. This will also help them to know where some tweaks can be made so that more tax is saved.