In the Union Budget 2025-26, several tax benefits have been introduced to support senior citizens in India. Key highlights include:
1. Increased Basic Income Exemption Limit: The basic income exemption limit for resident individual taxpayers has been raised from ₹7,00,000 to ₹12,00,000. This means that senior citizens with an annual income up to ₹12,00,000 are now exempt from income tax.
2. Enhanced Tax Rebate under Section 87A: The tax rebate under Section 87A has been increased, providing additional relief to senior citizens. This rebate effectively reduces the tax liability for those with taxable income up to ₹12,00,000.
3. Higher Deduction for Medical Insurance Premiums: Senior citizens can now claim a higher deduction of up to ₹50,000 for premiums paid towards health insurance policies under Section 80D. This benefit is available for premiums paid for self, spouse, and dependent children.
4. Increased Deduction for Medical Treatment of Specified Diseases: Under Section 80DDB, the deduction for medical expenses incurred on specified diseases has been increased to ₹1,00,000 for senior and super senior citizens. This allows for greater tax relief on medical expenses.
5. Exemption from Tax Deducted at Source (TDS) on Interest Income: Senior citizens can avoid TDS on interest income from fixed deposits and savings accounts by submitting Form 15H, provided their total income is below the taxable threshold. This ensures that interest income is received without any immediate tax deduction.
6. Standard Deduction for Salary and Pension Income: A standard deduction of ₹75,000 is available on salary and pension income, reducing the taxable income for senior citizens.
These measures aim to provide significant tax relief to senior citizens, enhancing their financial well-being. It’s advisable for senior citizens to consult with a tax professional to understand how these changes apply to their individual circumstances.
Income Tax Slab For Senior Citizen & Super Senior Citizen FY 2023-24 (AY 2024-25)
Contents hideBudget 2025 Updates
As per the budget 2025, the income up to Rs. 12,00,000 will have zero tax liability for the FY 2025-26 (AY 2026-27) under the new tax regime. Here’s how:
The revised tax slabs under the new regime for FY 2025-26 (AY 2026-27) are as follows:
Income Tax Slabs Tax Rate Upto Rs. 4,00,000 NIL Rs. 4,00,001 – Rs. 8,00,000 5% Rs. 8,00,001 – Rs. 12,00,000 10% Rs. 12,00,001 – Rs. 16,00,000 15% Rs. 16,00,001 – Rs. 20,00,000 20% Rs. 20,00,001 – Rs. 24,00,000 25% Above Rs. 24,00,000 30% With the revised tax structure, individuals earning up to Rs. 12,00,000 will have no tax liability due to the increased rebate of Rs. 60,000. For salaried individuals, the tax liability will be zero for incomes up to Rs. 12,75,000, due to the Rs. 75,000 standard deduction.
Note:
- The marginal relief on rebate is still applicable.
- The rebate is not available for income that is taxed at special rates (e.g., capital gains under section 112A).
As per Income-tax Act, 1961 senior citizen is an individual whose age is 60 years or more but less than 80 years. While a super senior citizen is an individual whose age is 80 years or more. This article briefly explains all the income tax provisions applicable to the resident senior citizen and super senior citizen.
Income Tax Act has categorized resident individuals into 3 parts-
- Individuals whose age is up to 60 years
- Senior citizens – Individuals whose age is 60 to 80 years
- Super senior citizens – Individuals over 80 years of age
Income Tax Slab For Senior Citizen
Senior citizens over 60 years of age have an option to pay tax as per the old or the new tax regime. The new tax regime is introduced by the central government via Finance Act, 2020, whereby concessional tax rates are introduced which is explained in the later part of the article. However, non resident senior citizens are not eligible for the below mentioned tax slabs as the normal provisions of income tax are applicable to them.
If an Individual is paying tax under the new tax regime, concessional tax rates are prescribed under section 115BAC with conditions to claim exemptions, deductions and losses. However, under the old tax regime, senior citizen individuals can enjoy unconditional claim of exemptions and deductions.
As per the old tax regime, the income tax slab rates for senior citizens for FY 2023-24 and FY 2024-25 (AY 2024-25 and AY 2025-26) are as follows-
| Income slab (in Rs.) | Income tax rate |
| Up to 3,00,000 | Nil |
| 3,00,001 to 5,00,000 | 5% of income over Rs. 3,00,000 |
| 5,00,001 to 10,00,000 | Rs. 10,000 + 20% of income over Rs. 5,00,000 |
| Above 10,00,000 | Rs. 1,10,000 + 30% of income over Rs. 10,00,000 |
Income Tax Slab For Super Senior Citizen
Super senior citizens over 80 years of age can also avail the benefit of old and new tax regime as they have the choice to opt between the two, whichever is more beneficial.
As per the old tax regime, the income tax slab rates for super senior citizen for FY 2023-24 and FY 2024-25 (AY 2024-25 and AY 2025-26) are as follows:
| Income slab (in Rs.) | Income tax rate |
| Up to 5,00,000 | Nil |
| 5,00,001 to 10,00,000 | 20% of income over Rs. 5,00,000 |
| Above 10,00,000 | Rs. 1,00,000 + 30% of income over Rs. 10,00,000 |
The above calculated tax for senior and super senior citizens shall be increased by Health and Education Cess @ 4% of the income tax.
Additionally, surcharge is applicable on the basis of total income as follows:
| Total income | Surcharge rate |
| > Rs. 50 Lakhs | 10% |
| > Rs. 1 crore | 15% |
| > Rs. 2 crore | 25% |
| > Rs. 5 crore | 37% |
Income Tax Slab Rate As Per New Tax Regime For Senior And Super Senior Citizen
Finance Act, 2020 introduced a new tax regime for individual taxpayers, according to which concessional tax is to be paid by them. This regime does not differentiate between senior and super senior citizens in terms of tax slabs. However, they have to forgo many deductions and exemptions available to them.
The income tax slab rate as per the new regime for FY 2023-24 (AY 2024-25) is:
| Income slab (in Rs.) | Income tax rate |
| Up to Rs. 3,00,000 | Nil |
| Rs 3,00,001 to Rs 6,00,000 | 5% |
| Rs 6,00,001 to Rs 9,00,000 | 10% |
| Rs 9,00,001 to Rs 12,00,000 | 15% |
| Rs 12,00,001 to 15,00,000 | 20% |
| Above Rs 15,00,000 | 30% |
According to the announcement made by Finance Minister, Nirmala Sitharaman in the Union Budget 2024, the income tax slab rate as per the new regime for FY 2024-25 (AY 2025-26) is:
| New regime tax rates (FY 2024-25) | |
| Income Slabs | Rates |
| Up to 3,00,000 | Nil |
| 3,00,001 to 7,00,000 | 5% |
| 7,00,001 to 10,00,000 | 10% |
| 10,00,001 to 12,00,000 | 15% |
| 12,00,001 to 15,00,000 | 20% |
| Above 15,00,000 | 30% |
The health and education cess remains the same at 4%. The surcharge is applicable on the basis of total income as follows:
| Total income | Surcharge rate |
| Where the total income > Rs 50 lakhs but ≤ Rs 1 crore | 10% |
| Where total income > Rs 1 crore but ≤ Rs 2 crore | 15% |
| Where total income > Rs 2 crore | 25% |
Note : The CBDT has clarified that a person born on 1st April would be considered to have attained a particular age on 31st March, the day preceding the anniversary of his birthday. In particular, the question of attainment of age of eligibility for being considered a senior/very senior citizen would be decided on the basis of above criteria. Therefore, a resident individual whose 60th birthday falls on 1st April, 2024, would be treated as having attained the age of 60 years in the FY 2023-24 and would be eligible for higher basic exemption limit of 3 lakh while computing his tax liability for AY 2024-25 under the old tax regime. Likewise, a resident individual whose 80th birthday falls on 1st April 2024 would be treated as having attained the age of 80 years in the FY 2023-24 and would be eligible for higher basic exemption limit of Rs. 5 lakh in computing his tax liability for AY 2024-25 under the old tax regime.
Sources of Income for Senior and Super Senior Citizens
Senior and super senior citizens usually earn income from the following sources :
- Pension
- Interest on savings accounts or fixed deposit schemes
- Rental Income from renting out a house property
- Income from Capital Gains
- Senior citizen saving schemes
- Reverse mortgage schemes
- Post office deposit schemes which also pay interest, and many others
Benefits to be Forgone by the Senior and Super Senior Citizen in Case they Avail the Benefit Of New Tax Regime
- Benefit of higher income exemption limit of Rs. 3,00,000 and Rs. 5,00,000
- Leave Travel Allowance
- House Rent Allowance (HRA)
- Conveyance Allowance
- Children Education Allowance
- Daily expenses in the course of employment
- Relocation allowance
- Helper allowance
- Other special allowances
- Professional tax and Entertainment allowance
- Interest on housing loan (Section 24) on self-occupied property
- Deduction under Chapter VI-A such as 80C, 80D, 80E, 80TTB, etc. However, they can avail deduction under Section 80CCD(2) i.e. employer contribution to NPS, 80CCH contribution to Agniveer fund and 80JJAA i.e. deduction for employment of new employees
Benefits Available To The Senior And Super Senior Citizen
Senior and super senior citizens are eligible to avail numerous tax benefits as offered by Income-tax Act, 1961 as are described below:
1. Higher income exemption limit
Senior citizens are required to pay tax over the income of Rs. 3,00,000 while this limit is Rs. 5,00,000 for super senior citizens under the old tax regime. This benefit is not available for the ordinary individuals as the limit is Rs. 2,50,000 for them.
If they are earning salary or pension income, they can claim a deduction of Rs. 50,000 from such income. For FY 2024-25 the standard deduction amount has been increased to Rs. 75,000 under the new tax regime.
3. Tax rebate under Section 87A
In the case of senior citizens, if taxable income is up to Rs. 5,00,000, then they can claim rebate from tax under the old tax regime, i.e. they are not required to pay any tax. Whereas under the new tax regime, the total income limit is upto Rs. 7 lakhs and rebate can be claimed upto Rs.25,000.
4. Higher deduction for medical insurance premium
Senior citizens can claim a deduction up to Rs. 50,000 under the old tax regime for medical insurance premium under Section 80D instead of Rs. 25,000, which is available to other individuals on the condition that it is paid through online banking channels. The same deduction cannot be claimed under the new tax regime.
5. Higher deduction in respect of expenses incurred for treatment of specified diseases or ailments
They can claim a flat deduction of Rs. 1,00,000 in respect of medical expenses incurred for specified diseases of self or dependent senior citizen relatives as specified in the Act under Section 80DDB.
6. Higher deduction in respect of bank and post office interest
Senior citizens taxpayers can claim a total deduction up to Rs. 50,000 in respect of interest earned from savings bank accounts, bank deposits, post office deposits or cooperative banks under Section 80TTB. While people below 60 years of age can claim deduction only up to Rs 10,000 on interest earned in savings bank account.
7. Exemption from advance tax payment
Senior citizens are not required to pay advance tax if they do not earn any income from business or profession. Therefore, no interest is levied on late payment of advance tax.
8. Benefit of Reverse Mortgage Scheme
If a senior citizen transfers his house under reverse mortgage scheme where he receives monthly installments, he is not required to pay any capital gains tax on such transfer of house.
9. Deduction on investment in Senior Citizens Savings Scheme
Senior citizens over 60 years of age can invest in the Senior Citizens Savings Scheme and save tax by claiming a deduction up to Rs. 1,50,000 under Section 80C under the old tax regime. This scheme also ensures regular as well as higher interest payouts. The same deduction cannot be claimed under the new tax regime.
When are Senior Citizens not Required to File Income tax Return?
Senior citizens are not required to file income tax return subject to following conditions:
- Their age is 75 years or more
- Total income consists of only pension and interest income. Interest income can be from any account maintained with the same bank in which they receive pension.
- They have submitted a declaration to the bank
- TDS is deducted by such bank under Section 194P
Read more at: Income Tax Benefits: Senior and very senior citizens get these benefits in income tax, know details