Is standard deduction applicable to pensioners? Answers to your personal finance queries  08/03/2020 02:28:10  2

Close-up of a businessman hand using scissor cutting the word on blackboard "Income Tax become Income".  

A. Contribution to Atal Pension Yojana is deductible under Section 80CCD(1B) of Income Tax Act, 1961. It is treated on par with NPS. This section provides for deduction of up to 50,000 over and above the overall limit of 1,50,000. provided under Section 80CCE.

A. Standard deduction is available for pension received from your old employer to the extent of 50,000 per year.

Deduction under Section 80TTB is allowed for all senior citizens up to a limit of 50,000 per year for interest received from the funds deposited in banks, post office schemes and co-operative societies engaged in the functions of bank.

Section 80TTB deduction benefits can be claimed from the respective ITR under deductions under Chapter VIA. You may enter the appropriate deduction amount based on your interest income subject to a limit of 50,000.

A. First, you will be eligible for a standard deduction of 50,000 for the amount received from your former employer as superannuation annuity pension, as the same is declared under Income from Salaries.

However, the annuity pension received from the life insurance policy is covered under Income from Other Sources and thus, standard deduction cannot be availed of.

Two, under Section 80D for senior citizens with no coverage whatsoever from any policy, medical expenses incurred can be availed up to 50,000.

However, in your case, since you are covered under CGHS, you will not be eligible to claim deduction towards medical expenses incurred for which reimbursement is not received.

(The author is partner, GSS & Associates, Chartered Accountants, Chennai)

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