Income Tax Slab For Senior Citizen & Super Senior Citizen FY 2023-24 (AY 2024-25)
The Income Tax Act of 1961 defines a senior citizen as an individual aged 60 or above but less than 80, and a super senior citizen as an individual of 80 years or above. Here’s a breakdown of the income tax provisions applicable to both resident senior citizens and super senior citizens.
The Income Tax Act categorizes resident individuals into three parts:
- Individuals up to 60 years of age
- Senior citizens (60 to 80 years)
- Super senior citizens (80 years and above)
Income Tax Slab For Senior Citizen
Senior citizens aged 60 and above may choose to pay taxes under the old or new regime. The new regime, introduced by the Finance Act of 2020, offers concessional tax rates, elaborated later in this article. Non-resident senior citizens are not eligible for the tax slabs mentioned below, as normal income tax provisions apply to them.
Under the old tax regime, the income tax slab rates for senior citizens for FY 2023-24 (AY 2024-25) 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 3,00,000 |
| 5,00,001 to 10,00,000 | 10,000 + 20% of income over 5,00,000 |
| Above 10,00,000 | 1,10,000 + 30% of income over 10,00,000 |
Income Tax Slab For Super Senior Citizen
Super senior citizens aged 80 and above have the option to choose between the old and new tax regimes, based on whichever is more beneficial to them.
Under the old tax regime, the income tax slab rates for super senior citizens for FY 2023-24 (AY 2024-25) 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 5,00,000 |
| Above 10,00,000 | 1,00,000 + 30% of income over 10,00,000 |
The calculated tax for senior and super senior citizens is subject to an increase by Health and Education Cess at 4% of the income tax, along with applicable surcharge rates based on total income.
Income Tax Slab Rate As Per New Tax Regime For Senior And Super Senior Citizen
Introduced by the Finance Act of 2020, the new tax regime offers concessional tax rates for individual taxpayers. The regime does not differentiate between senior and super senior citizens in terms of tax slabs, but entails forgoing many deductions and exemptions available in the old tax regime.
The income tax slab rate as per the new regime for FY 2023-24 is as follows:
| Income slab (in Rs.) | Income tax rate |
|---|---|
| Up to 3,00,000 | Nil |
| 3,00,001 to 6,00,000 | 5% |
| 6,00,001 to 9,00,000 | 10% |
| 9,00,001 to 12,00,000 | 15% |
| 12,00,001 to 15,00,000 | 20% |
| Above 15,00,000 | 30% |
The health and education cess remain at 4%, and surcharge is applicable based on total income.
| 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 Central Board of Direct Taxes (CBDT) has clarified the criteria for attaining a particular age, ensuring eligibility for higher basic exemption limits, especially for residents turning 60 or 80 years old.
Sources of Income for Senior And Super Senior Citizens
Senior and super senior citizens usually earn income from various sources, including:
- Pension
- Interest on savings account or fixed deposit schemes
- Rental income from property
- Capital gains
- Senior citizen saving schemes
- Reverse mortgage schemes
- Post office deposit schemes, among others
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
Calculation of Tax for Senior Citizens
To calculate the tax liability of senior citizens or super senior citizens, their income from all the sources is added together. This gives the aggregate gross total income. Thereafter, under the old regime income tax slabs applicable for FY 2023-2024 (AY 2024-2025) there are various deductions and exemptions which are available to senior citizens to lower their tax liability. These deductions and exemptions include the following:
Deduction under Section 80C
This section allows senior citizens or super senior citizens deductions of up to INR 1.5 lakhs from their gross total income for eligible investments and expenses. The list of popular investments which are covered under Section 80C include the following –
- 5 year fixed deposits
- Investment in Equity Linked Savings Scheme (ELSS)
- Investment in Public Provident Fund (PPF)
- Life insurance premiums (LIP) paid
- Investment in Senior Citizen Saving Scheme (SCSS) or
- National Saving Certificates etc.
Deduction under Section 80CCC
If you pay premiums towards a specified pension plan, such premiums paid would be allowed as a deduction under this section. The maximum limit is INR 1.5 lakhs together with section 80C. Further, 50,000 is allowed u/s 80CCD(1B) and further deduction u/s 80CCD(2) is separately allowed in respect of contributions made by the employer subject to the limit of 10% of Salary, in case of government employee the limit is 14% of salary income. The tax benefit u/s 80CC(2) is available under the new tax regime proposed in Budget 2020.
Deduction under Section 80CCD(1B)
Under this section, investments done towards the National Pension Scheme are allowed as a deduction up to a maximum of INR 50,000. This deduction is over and above the total deduction available under Section 80C and Section 80CCC. NPS account can be opened at the age of less than 65 years.
Deduction under Section 80D
Health insurance premiums paid for availing health insurance coverage for senior citizens or super senior citizens is allowed as a deduction under this section up to a maximum of INR 50,000. Also, tax benefit in respect of expenses incurred for preventive health checkup amounting maximum upto Rs 5000 can be availed under the same section.
In case no medical policies have been taken for senior citizens then the medical expenditures incurred for them (in payment mode other than cash) can be claimed as a deduction under section 80D.
Deduction under Section 80DD
If the resident senior citizen or super senior citizen incurs expenses for the treatment or maintenance of a disabled dependent as may be prescribed, deduction can be claimed under this section for such expenses. The limit of deduction allowed is fixed and depends on the disability suffered. A fixed deduction of INR 75,000 is allowed. For severe disabilities (80% or more), the deduction limit increases to INR 1,25,000.
Deduction under Section 80DDB
Expenses incurred for treating specific illnesses are covered under section 80DDB. If resident senior citizens or super senior citizens or their dependents suffer from pre-specified diseases, they can claim a deduction of expenses incurred on treating such diseases. From FY 2018-19 the limit of deduction would be the actual costs incurred up to a maximum of INR 1 lakh.
Deduction under Section 80G
If senior citizens or super senior citizens donate to specified charitable causes and institutions, they can claim a deduction for the donation made. Deduction is allowed either at 50% of the donated amount or 100% of the donated amount depending on the charity chosen.
Deduction under Section 80GGC
If senior citizens or super senior citizens contribute money to a political party or an electoral trust, the contribution would be allowed as a deduction under Section 80GGC. Donation in cash is not allowed as deduction.
Deduction under Section 80RRB
If a resident senior citizen or super senior citizen has a registered patent and earns royalty incomes on such patents, the royalty received is allowed as a deduction from taxable income. The maximum amount of royalty which would be allowed as a deduction would be limited to INR 3 lakhs. Moreover, to claim the deduction, the following conditions should be fulfilled by the senior citizen or super senior citizen –
- He or she should be an Indian resident
- He or she should have registered the patent on or after 1st April 2003 under the Patents Act 1970
- To claim the deduction the senior citizen or super senior citizen would have to submit a certificate(Form-10CCE) to the tax authorities and the certificate should be signed by the prescribed authorities
- The senior citizen or super senior citizen should be the patentee
Deduction under Section 80TTB
If the resident senior citizen or super senior citizen has made deposits in a bank or post office, the interest earned on such deposits, including interest from savings account, fixed deposit schemes and post office deposit schemes would be allowed as a deduction in the hands of the senior citizen. Deduction on interest income earned would be limited to INR 50,000.
Deduction under Section 80U
The deduction under Section 80U is available to resident senior citizens or super senior citizens who suffer from a disability or mental retardation. This deduction amount is fixed at INR 75,000 which increases to INR 1.25 lakhs if the senior citizen or super senior citizen has severe disabilities.
Besides the various deductions available under Chapter VI A of the Income Tax Act, the amount received as a loan by senior citizens or super senior citizens on reverse mortgage scheme is not taxable. Under the scheme of reverse mortgage, the senior citizen or super senior citizen can avail EMIs for the value of a property belonging to him/her by mortgaging the property. The EMI payments continue throughout the lifetime of the senior citizen or super senior citizen and provide a source of regular inflow. When the senior citizen or super senior citizen dies, the house property is sold to realise the loan.
Moreover, resident senior citizens and super senior citizens are also not required to pay any advance tax on their incomes if they are not having income from business or profession. They file their returns through self-assessment tax after the completion of the financial year. After the income is aggregated and the eligible deductions are deducted from the income, the taxable income of the individual is ascertained. This taxable income is, then, subject to tax as per the applicable tax slab.
Frequently Asked Questions
Is ITR filing mandatory for senior citizens?
Yes, senior citizens have to file income tax returns mandatorily. However, senior citizens over 75 years of age, whose income consists of only pension and interest income from the same bank are exempted from filing income tax return provided he submits a declaration under Form 12BB.
Which ITR form is required to file the income tax return of senior citizens?
Senior citizens have to file ITR-1 if their income consists of salary or pension, rent from residential property, or income from other sources such as interest. However, if their income includes salary or pension, rent from residential property, income from the sale of capital assets such as shares or property or income from other sources, then they have to file ITR-2.
Can senior citizens file an offline ITR?
Super senior citizens over 80 years of age have an option to submit ITR-1 or ITR-4 through offline mode.
Can senior citizens claim any deduction from their pension income?
Yes, senior citizens can claim a standard deduction of Rs. 50,000 from pension or salary income.
Is interest earned on the Senior Citizen Savings Scheme eligible for any deduction or tax benefit?
Yes, the interest earned on Senior Citizen Savings Scheme is eligible for deduction up to Rs. 50,000 under Section 80TTB.
How much interest on FD is eligible for a tax deduction for senior citizens?
Senior citizens can claim a deduction of Rs. 50,000 on interest received on fixed deposits under Section 80TTB.
What is the tax slab for non-resident (NRI) senior citizens?
Non resident senior citizens over 60 years of age cannot avail the benefits available to resident senior citizens. Therefore, the tax slab applicable to normal individuals below 60 years of age is applicable to NRI senior citizens. They have to pay tax if their income exceeds Rs. 2,50,000.
Can a non-resident senior citizen claim a rebate under Section 87A?
No, NRI senior citizens are not eligible to claim the rebate under Section 87A. Therefore, they have to pay tax if their income is exceeding Rs. 2,50,000.
What is the tax rate in case of capital gains made by senior citizens or what is the tax rate in case of sale of shares by senior citizens?
Tax slab rates are not applicable in the case of capital gains, therefore, in the case of listed equity shares if shares are sold within a year, 15% tax rate is applicable under Section 111A and if shares are sold after 1 year, 10% tax rate is applicable under Section 112. On the other hand, in case of sale of unlisted shares, tax is to be paid as per the prescribed slab rates if shares are sold within 2 years and the tax rate is 20% in case shares are sold after a period of 2 years.
Can senior citizens claim deductions under sec 80C to 80U if they opt for the new tax regime?
No, senior citizens can claim deductions under sec 80c to 80u if they opt to pay tax under the old tax regime. However, they can avail deduction under Section 80CCD(2) employer contribution to NPS, 80CCH contribution to Agniveer Fund and 80JJAA, i.e. deduction for employment of new employees
Will senior citizens have age relaxation benefits if they opt to pay tax under the new tax regime under sec 115BAC?
No, senior citizens are entitled to age relaxation benefits if they exercise the option of paying taxes under the old tax regime.
Can senior citizens claim deduction under 80DDB?
On specific illness covered, senior citizens or super citizens or their dependents can claim deduction under section 80ddb.