Your CTC up to ₹15 lakh or more can become tax-free under new regime in FY 2025-26
The Union Budget 2025 proposed nil tax on up to ₹12 lakh taxable income under the new tax regime. For salaried employees, the tax-free income limit will increase to a taxable income of up to ₹12.75 lakh due to the ₹75,000 standard deduction available to them.
Ever since the tax-relief announcement in Budget 2025, many salaried employees have been curious about whether their total salary package or CTC (cost-to-company) needs to be exactly ₹12 lakh to qualify for the nil tax benefit. Or, can they have a higher CTC and yet claim pay zero tax under the new regime?
The answer is that your total CTC can exceed ₹12 lakh, and you may still be eligible to claim the nil tax benefit. However, to understand how this is possible, you should first know the difference between your salary package or CTC and your taxable income.
Though the new tax regime offers very few exemptions and deductions, tax experts are of the view that nil tax on CTCs over ₹12 lakh can be possible by smartly rejigging the salary structure.
For this, employees would need to have their employers’ structure their salary package in a way that reduces their taxable income to ₹12 lakh.
Such a restructuring would depend on certain components of the salary package that help in reducing the taxable income, which may vary from one employee to another.
However, this might not be feasible for every employee, especially if employer is unwilling to adjust the salary structure.
Achieving a nil tax liability on a salary over ₹12 lakh under the new tax regime is possible but contingent upon the specific components of the salary package,” said CA Dr Suresh Surana.
“Elements such as the basic salary, dearness allowance (DA), and employer contributions to retirement benefits like the National Pension System (NPS) and Employees’ Provident Fund (EPF) play pivotal roles in determining taxable income. Strategically structuring these components can maximise available deductions and exemptions, thereby reducing the overall tax liability,” he added.
How can you have nil tax on ₹15 lakh CTC
Let’s understand this further with the example of an employee whose CTC is around ₹15 lakh.
According to Dr Surana, this person can claim the nil tax benefit if his CTC package includes certain components like dearness allowance, house rent allowance, LTA, conveyance reimbursement, provident fund and NPS contributions by the employer.
“There is no fixed salary amount up to which tax liability is nil under the new tax regime. Instead, it depends on the structuring of salary components such as basic salary, dearness allowance (DA), employer contributions to EPF/NPS, and other tax-exempt allowances,” said Dr Surana.
“Proper salary structuring can enable in maximising deductions and rebates, effectively optimising the tax liability for higher salary levels,” he added.
What could be the complications?
As explained above, it’s technically possible to rejig the salary structure to claim nil tax benefit under the new tax regime if your CTC is ₹15 lakh or more. However, it may not be easy as a lot depends on your employer and your monthly cash flow requirements.
Such an exercise can reduce your take home pay. Take for instance the above example. The total employer’s contribution to NPS and EPF in this case is ₹1.9 lakh, which reduces his gross income to ₹13,15,200. As both NPS and EPF help in saving for retirement, a lot of employees may not want to lock their funds in both schemes.
Income Tax Returns and Forms applicable for Senior Citizens and Super Senior Citizens for AY 2024-2025. It outlines the eligibility criteria for Senior Citizens and Super Senior Citizens, exemption from filing income tax returns, applicable ITR forms, and relevant forms such as Form 15H, Form 12BB, Form 16, and others.
Senior Citizens and Super Senior Citizens for AY 2024-2025
Returns and Forms Applicable for Senior Citizens and Super Senior Citizens for AY 2024-2025
An individual resident who is 60 years or above in age but less than 80 years at any time during the previous year is considered as Senior Citizen for Income Tax purposes. A Super Senior Citizen is an individual resident who is 80 years or above, at any time during the previous year.
This return is applicable for a Resident (other than Not Ordinarily Resident) Individual having Total Income from any of the following sources up to ₹ 50 lakh.
4. ITR-4 (SUGAM)– Applicable for Individual, HUF and Firm (other than LLP)
This return is applicable for an Individual or Hindu Undivided Family (HUF), who is Resident other than not ordinarily resident or a Firm (other than LLP) which is a Resident having Total Income up to ₹ 50 lakh and having Income from Business and Profession which is computed on a presumptive basis and income from any of the following sources:
Salary / Pension
One House Property
Other sources (Interest, Family Pension, Dividend etc.)
(a) is a Director in a company (b) has held any unlisted equity shares at any time during the previous year (c) has any asset (including financial interest in any entity) located outside India (d) has signing authority in any account located outside India (e) has income from any source outside India (f) is a person in whose case payment or deduction of tax has been deferred on ESOP
(g) has total income exceeding Rs. 50 Lakhs
Please note that ITR-4 (Sugam) is not mandatory. It is a simplified return form to be used by an Assessee, at his option, if he is eligible to declare Profits and Gains from Business and Profession on presumptive basis u/s 44AD, 44ADA or 44AE.
4. Form 16A – Certificate u/s 203 of the Income Tax Act, 1961 for TDS on Income other than Salary
Provided by
Details provided in the form
Deductor to Deductee
Form 16A is a Tax Deducted at Source (TDS) Certificate issued quarterly that captures the amount of TDS, Nature of Payments and the TDS Payments deposited with the Income Tax Department.
Note: Information regarding (Advance Tax/SAT, Details of refund, SFT Transaction, TDS u/s 194 IA,194 IB,194M, TDS defaults) which were available in 26AS will now be available in AIS mentioned below.
Income Tax Department (It can be accessed after logging on to Income Tax e-Filing portal)Path to access AIS: Go to e-filing portal>login >AIS
Tax Deducted / Collected at SourceSFT InformationPayment of taxesDemand / RefundOther information (Like; Pending/Completed proceedings, GST information, Info received from foreign govt. etc
Path to access AIS: Go to e-filing portal>login>Services>AIS
7. Form 10E – Form for furnishing particulars of Income for claiming relief u/s 89(1) when Salary is paid in arrears or advance
Arrears / Advance SalaryGratuityCompensation on TerminationCommutation of Pension
8. Form 67- Statement of Income from a country or specified territory outside India and Foreign Tax Credit
Submitted by
Details provided in the form
Taxpayer
Income from a country or specified territory outside India and Foreign Tax Credit claimed
9. Form 3CB-3CD
Submitted by
Details provided in the form
Taxpayer who is required to get his accounts audited by an Accountant u/s 44AB.To be furnished one month before the due date for furnishing the return of income under sub-section (1) of section 139.
Report of audit of Accounts and Statement of Particulars required to be furnished u/s 44AB of the Income Tax Act, 1961.
Taxpayer who is required to obtain a report from an Accountant u/s 92E for entering into an International Transaction or Specified Domestic Transaction.To be furnished one month before the due date for furnishing the return of income under sub-section (1) of section 139.
Audit report u/s 92E of the Income Tax Act, 1961, relating to International Transaction(s) and Specified Domestic Transaction(s).
Tax Slabs for AY 2024-25
The Finance Act 2023 has amended the provisions of Section 115BAC w.e.f AY 2024-25 to make new tax regime the default tax regime for the assessee being an Individual, HUF, AOP (not being co-operative societies), BOI or Artificial Juridical Person. However, the eligible taxpayers have the option to opt out of new tax regime and choose to be taxed under old tax regime. The old tax regime refers to the system of income tax calculation and slabs that existed before the introduction of the new tax regime. In the old tax regime, you taxpayers have the option to claim various tax deductions and exemptions.
In case of “non-business cases”, option to choose the regime can be exercised every year directly in the ITR to be filed on or before the due date specified under section 139(1).
In case of eligible taxpayers having income from business and profession and wants to opt out of new tax regime, the assessee would be required to furnish Form-10-IEA on or before the due date u/s 139(1) for furnishing the return of income. Also, for the purpose of withdrawal of such option i.e. opting out of old tax regime shall also be done by way of furnishing Form No.10-IEA.
However, in case of eligible taxpayers having income from business and profession option to switch to old tax regime and withdraw the option in any subsequent AY is available only once in lifetime.
Note: The enhanced surcharge of 25% & 37%, as the case may be, is not levied, from income chargeable to tax under sections 111A, 112, 112A and Dividend Income. Hence, the maximum rate of surcharge on tax payable on such incomes shall be 15%, except when the income is taxable under section 115A, 115AB, 115AC, 115ACA and 115E.
2. Rebate u/s 87A: Resident Individuals are also eligible for a Rebate of up to 100% of income tax subject to a maximum limit depending on tax regimes as under:
3. The rate of Health & Education cess remains same in both the regimes.
Surcharge, Marginal Relief and Health & Education cess
What is Surcharge?
Surcharge is an additional charge levied for persons earning Income above the specified limits, it is charged on the amount of income tax calculated as per applicable rates. For rates of surcharge, refer table above.
What is Marginal Relief?
Marginal relief is a relief from Surcharge, provided in cases where the Surcharge payable exceeds the additional Income that makes the person liable for Surcharge. The amount payable as Surcharge shall not exceed the amount of Income earned exceeding ₹ 50 lakhs, ₹ 1 crore, ₹ 2 crore or ₹ 5 crore respectively as under:
Net Income Range
Marginal Relief
Exceeds (Rs.)
Does not exceed (Rs.)
50 Lakh
1 Crore
Amount payable as income tax and surcharge shall not exceed the total amount payable as income tax on total income of Rs 50 Lakh by more than the amount of income that exceeds Rs 50 Lakhs
1 Crore
2 Crore
Amount payable as income tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 1 crore by more than the amount of income that exceeds Rs. 1 crore
2 Crore
5 Crore
Amount payable as income tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 2 crore by more than the amount of income that exceeds Rs. 2 crore
5 Crore
Amount payable as income tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 5 crore by more than the amount of income that exceeds Rs. 5 crore.
What is Health and Education cess?
Health & Education cess @ 4% shall also be paid on the amount of income tax plus Surcharge (if any)
Investments / Payments / Incomes on which I can get tax benefit
Section 24(b) – Deduction from Income from house property on interest paid on housing loan and housing improvement loan. In case of self-occupied property, the upper limit for deduction of interest paid on housing loan is ₹ 2 lakh. However, this deduction is not available for person opting for New tax Regime.
Interest on loan u/s 24(b) allowable is tabulated below:
Nature of Property
When Loan was taken
Purpose of Loan
Allowable (Maximum Limit)
Self-occupied
On or after 01/04/1999
Construction or purchase of house property
₹ 2,00,000
On or after 01/04/1999
For Repairs of house property
₹ 30,000
Before 01/04/1999
Construction or purchase of House property
₹ 30,000
Before 01/04/1999
For Repairs of house property
₹ 30,000
Let-out
Any Time
Construction or purchase of House property
Actual value without any limit
Tax deductions specified under Chapter VI-A of the Income Tax Act
₹ 5,000 for preventive health check up, included in above limit
Deduction towards medical expenditure incurred on a Senior Citizen, if no premium is paid on health insurance coverage
For Self / Spouse or Dependent Children – Deduction limit is ₹ 50,000
For Parents – Deduction limit is ₹ 50,000
80DD
Deduction towards payments made towards Maintenance or Medical Treatment of a Disabled dependent or paid / deposited any amount under relevant approved scheme.
Flat deduction of ₹ 75,000 available for a person with Disability, irrespective of expense incurredThe deduction is ₹ 1,25,000 if the person has Severe Disability (80% or more)
Note: If Taxpayer is claiming deduction u/s 80DD then its recommended to file form 10-IA also before filing of return. Form 10IA can be filed later also however it is recommended to file form 10-IA along with return of income to avoid any inconvenience later.
80DDB
Deduction towards payments made towards Medical Treatment of Self or dependant for specified disease.
Deduction limit of ₹ 40,000 (₹ 1,00,000 if Senior Ctizen)
Deduction towards interest payments made on loan taken for acquisition of residential house property where the loan is sanctioned between 1st April 2016 to 31st March 2017.
Deduction limit of ₹ 50,000 on the interest paid on loan taken
80EEA
Deduction towards interest payments made on loan taken for acquisition of residential house property for the first time where the loan is sanctioned between 1st April 2019 to 31st March 2022 and deduction should not have been claimed u/s 80EE.
Deduction limit of ₹ 1,50,000 on the interest paid on loan taken
80EEB
Deduction towards interest payments made on loan for purchase of electric vehicle where the loan is sanctioned between 1st April 2019 to 31st March 2023.
Deduction limit of ₹ 1,50,000 on the interest paid on loan taken
National Urban Poverty Eradication Fund as setup and notified by Central Government
Note: No deduction shall be allowed under this Section in respect of donation made in cash exceeding ₹ 2000/- or if Gross Total Income includes Income from Profit / Gains from Business / Profession
80GGC
Deduction towards Donations made to Political Party or Electoral Trust
Flat ₹ 75,000 deduction for a person with Disability, irrespective of expense incurred Flat ₹ 1,25,000 deduction for a person with Severe Disability (80% or more), irrespective of expense incurred
Note: If Taxpayer is claiming deduction u/s 80U then its recommended to file form 10-IA also before filing of return. Form 10IA can be filed later also however it is recommended to file form 10-IA along with return of income to avoid any inconvenience later.
In addition to tax benefits applicable regardless of age of taxpayer, there are certain enhanced / additional benefits for Senior / Super Senior Citizen. The additional benefits are listed below:
Section 80TTB of the Income Tax Act allows tax benefits on interest earned from deposits with banks, post office or co-operative banks. The deduction is allowed for a maximum interest income of up to ₹ 50,000 earned by the Senior Citizen. Both the interest earned on saving deposits and fixed deposits are eligible for deduction under this provision.
Tax benefits with respect to medical insurance and expenditure
According to Section 80D of the Income Tax Act, Senior Citizens may avail a higher deduction of up to ₹ 50,000 for payment of premium towards medical insurance policy. The limit is ₹ 25,000 in case of Non-Senior Citizens.
Further Section 80DDB of the Income Tax Act allows tax deduction on expenses incurred by an individual on himself or a dependent towards the treatment of specific diseases as stated in the act. The maximum deduction amount in case of a senior citizen is ₹ 1 lakh (₹ 40,000 for Non-Senior Citizen taxpayers).
The video discusses the exemptions, deductions and benefits available to senior citizens and super senior citizens under the Income Tax Act, 1961.
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.
Here are some exemptions, deductions and benefits that may ease financial responsibilities for taxpayers over 60 years.
1. The elementary exemption benefit
Every individual in India, who falls under the income bracket to pay tax, is allowed some elementary waivers.
For senior citizens, the government has increased this basic exemption limit up to ₹3 lakhs under both tax regimes, effective April 1, 2023.
Super citizens get a higher advantage, considering their income and age. For them, this waiver is of up to ₹5 lakhs under the old tax regime in one financial year. Under the new regime, however, the basic exemption limit is up to ₹3 lakhs.
Other than the senior or super citizens, this exemption for ordinary citizens is up to ₹2,50,000/- only under the old tax regime, which leads them to pay more taxes.
For super citizens, under section 80D, the deduction for the payment of medical premium as well as the actual expenses incurred on their treatment are allowed.
3. Privilege on interest income
Senior citizens who are residents of India will have to pay no tax on their interest earned up to ₹50,000 in a financial year.
Applicable under section 80TTB of Income Tax, this will consider interest earned in the savings bank account, deposits in a bank, and/or deposits in the post-office. When filing their Income Tax Return, senior citizens must fill the form 15H.
Also, Section 194A provides senior citizens with the benefit of a higher TDS deduction on interest payments of up to ₹ 50,000 by the bank, post office or cooperative bank. This limit is ₹ 40,000 for non-senior citizens.
4. Exemption from filing ITR
Budget 2021 introduced a Section 194P, under which senior citizens aged 75 and above are exempted from filing the ITR if they fulfil the following criteria:
They have furnished a declaration form 12BBA to the specified bank.
5. No advance tax
While individuals below the age of 60 have to pay an advance tax if their tax liability is ₹10,000 or more in a financial year, senior citizens are free from this burden unless they make income from business or profession.
6. Allowance for the treatment of specified diseases
The Indian government allows individual taxpayers and dependent relatives below the age of 60 not to pay tax if medical treatment costs close to ₹40,000.
For dependent senior and super senior citizens, this deduction limit is up to ₹1 lakh if they undertake any treatment for a specified disease/critical illness in a financial year, as per Section 80DDB of the Income Tax Act.
7. Income Tax Return benefits
Super Senior Citizens (individuals above 80 years) can file for their Income Tax Returns through either Sahaj (ITR 1) or Sugam (ITR 4). They can choose to do it either manually or electronically.
8. No tax under the Reverse Mortgage Scheme
Senior citizens may reverse mortgage on any of their accommodations to make monthly earnings. The ownership of the property remains with the senior citizen, and they are given monthly payments for it. The amount paid in instalments to the owner is exempted from Income Tax.
9. Standard deductions from pension income
Senior citizens are allowed a standard deduction of ₹50,000 for their pension income, including family pensioners who can avail of deduction benefits up to Rs 15,000.
Health insurance is a form of insurance that covers medical expenditures incurred by an individual for long-term well-being. Ultimately, health insurance allows individuals and families to cover the high expenses of medical treatment. There are tax advantages to purchasing and having health insurance coverage. The premium amount paid for health insurance is tax deductible. Section 80D of the Income Tax Act allows you to claim tax benefits on your health insurance premiums. As a result, based on an interview with various industry experts, here’s how you can get tax breaks on your health insurance premiums.
One of the advantages of having a health insurance policy, apart from financial protection of the family, is also prudent tax planning. Premium paid towards a family’s health insurance policy is eligible for exemptions under Section 80D of Income Tax benefit though there is an upper ceiling to it. The premium for health insurance policy depends upon the sum insured, members, getting covered, and their age.
Typically, family floater policies offer coverage to entire family ~ self, spouse, dependent children, and dependent parents in a single policy. Tata AIG’s MediCare Premier family floater policy offers coverage up to INR 3 Crore sum insured and premium paid qualifies for income tax exemption under applicable provisions. One can avail tax deductions under Section 80D up to ₹1lakh for Self and Family if Eldest is above 60 years + Senior Citizen Parents
Also, customers looking for maximum tax advantage can also opt for a higher tenure policy like 2 years or 3 years, while tax deductions can be claimed for each year up to the defined limit. We are Tata AIG are offering long-term discounts on our various retail health product offerings like Tata AIG Medicare, Tata AIG Medicare Premier, and Tata AIG Medicare Plus”
A health insurance policy is a product that protects you from the financial consequences of a wide range of health-related expenses, from minor illnesses and injuries to critical diseases.
As per Section 80D of the Income Tax Act, the premium paid for a health insurance policy is deductible from the taxable income. The upper limit for the deductible amount is Rs. 25,000 and can be extended to up to Rs. 50,000 for senior citizens (with effect from 1 April, 2018). This implies that the policyholder is now eligible to enjoy a deduction of up to Rs. 75,000 from the taxable income. In rare cases, when the age of both the proposer and his parents is more than 60 years, the deductible amount can extend up to Rs. 1,00,000 (Rs. 50,000+Rs. 50,000).
CA Arpit Jain, Joint MD, Arihant Capital In many countries, including India, health insurance premiums are tax-deductible, which means that individuals can claim them as a deduction on their income tax returns. This tax benefit can help to reduce the overall cost of health insurance and make it more affordable for individuals and families.
In general, taxpayers must meet certain requirements to claim a tax deduction for health insurance premiums, such as
• The insurance must be purchased for the taxpayer, their spouse, or their dependents.
• The insurance must provide coverage for medical expenses, including doctor visits, hospitalization, and prescription drugs.
The tables below provide an overview of how much insurance premium towards your health policy qualifies for exemption under Section 80D of the Income Tax Act and the total cash benefit for individuals falling in different income brackets.
TABLE A
Self, Family, Dependent Children
Dependent Parents
Total Tax Deduction u/s 80D
Individuals & Parents below age 60yrs
25000
25000
50000
Individuals & Family below age 60; but parents above 60yrs
25000
50000
75000
Individuals, Family & Parents above 60yrs
50000
50000
100000
Members of HUF
25000
25000
25000
TABLE B: Tax Benefit
Premium
% of Rebate
Tax Rebate
Slab Rs. 2.50 Lacs to Rs. 5.00 Lacs
25000
5.20%
1300
Slab Rs. 5.00 Lacs to Rs. 10.00 Lacs
25000
20.80%
5200
Slab above Rs. 10 Lacs
25000
31.20%
7800
For example, if you are only paying for insurance premiums for yourself and your spouse, the total deduction you can claim is ₹25,000. Now if you fall under the income slab of ₹10 lacs and above, you will save a total of ₹7,800 in taxes by claiming this deduction under Section 80D of ITA.
To claim this deduction, you will need to provide your premium payment receipt and your insurance policy copy which shows the name of the family members and their relation and age. It is important to note, to take the benefit of this deduction, the premium should be paid in any mode other than cash. Premium paid in cash will not be considered. However, the payment for Preventive Health check-ups can be done in cash.
Siddharth Singhal, Business Head – Health Insurance, Policybazaar.com
Buying a health insurance policy not just ensures a sound financial safety during medical exigency but also serves as an actual tax-saving tool. The insured person can save tax under Section 80D. Any policyholder is entitled to this tax rebate for health insurance premium paid either for self, partner, dependent children, and even for parents.
For self, partner, dependent children the maximum tax exemption is Rs. 25,000, while for parents (aged less than 60 years), an additional exemption of ₹25,000 is available. However, if the parents are aged 60 years or above, the deduction is ₹50,000 while, if both the taxpayer and parents are above 60 years, the tax exemption amount goes up to Rs.1 lakh.
Moreover, policyholders are entitled for claim deduction of Rs. 5,000 against preventative medical check-ups under Section 80D of the IT Act. This exemption is within the standard limit under Section 80D (Rs. 25,000 for self, partner and children, and ₹50,000 for senior citizen parents). Whether an individual is paying health premium for critical illness insurance or indemnity based insurance i.e. family floater plan or a senior citizen health plan or individual mediclaim policy, they are eligible to get tax rebate through Section 80D.
Sujit Bangar, Founder, Taxbuddy.com
We all are aware about health insurance benefit for tax deductions. Where we get confused are two things.
Firstly , deduction for health insurance is different from deduction under 80C bracket. This health insurance deduction is over and above 150k limit of 80C.
Secondly, we all do regular health check up. Especially, everybody amongst us has done RTPCR test once or twice. This expenditure can be claimed as deduction u/s 80 D upto ₹5,000/- . We should not mis out on this.
Union Budget 2023 for women: Is there a case for special income tax exemptions, slabs and benefits for women? Finance Act 2012 abolished the differential tax slabs that were in vogue for women and introduced a unified tax structure that was common for both men and women. Until then, women had slightly higher tax benefits vis-à-vis men. Experts are of the opinion that to promote the future of working women, it is important to give them additional tax benefits.
As of now, individuals be it men or women are subject to the same income tax slab rates. The differential tax slabs are applicable only with respect to the age of the individuals and not with respect to gender
Income Tax for Women
Sudhakar Sethuraman, Partner, Deloitte India is of the view that presently there is a strong ask for reducing the income tax slab rates and/or widening the income tax slabs. “Instead of meeting this demand for all individuals, perhaps the Finance Minister could extend this benefit only to women,” he tells TOI.
“Going by the notion that women are better in savings, a benefit here will forge a path that is fiscally motivating and encouraging for the women of India. Considering India’s outlook and striving towards women empowerment and women in leadership with various schemes such as Ujjwala scheme, Beti Bachao Beti Padhao, Sukanya Samriddhi Accounts, and Sainik Schools, to name a few, tax benefits are just another step to ensure progress and development of not only women but also of the nation,” Sethuraman said.
Kuldip Kumar, Former National Leader – Global Mobility Practice, PwC India says that extending higher tax relief to women taxpayers is necessary to strengthen their financial independence.
“During Covid-19 pandemic, several women lost their husbands who were sole earners in the family and thus, such women now have the financial responsibility to raise their children. Such single women parent tax payers need to be given a separate deduction/exemption to increase their disposable income,” Kuldip Kumar tells TOI. He recommends the following:
These proposals are also aligned with the government’s other schemes like Beti Bachao Beti Padhao and/or Ujjawala Yojana etc. for the women section of society, he points out.
Akhil Chandana, Partner, Grant Thornton Bharat points out that women form approximately 48% of India’s total population. “However their participation towards the country’s economic growth has been limited due to less opportunities and higher domestic responsibilities,” he notes.
Chandana expects Union Budget 2023 to increase the income tax slabs for women and introduce certain additional tax benefits in terms of providing higher tax deductions.
Tax Benefits With Separate Income Tax Benefits for Women
Particulars
Existing (Old Regime)
Proposed* (Old Regime)
Existing (New Regime)
Proposed* (New Regime)
Gross total income
750,000
750,000
750,000
750,000
80C Deduction
150,000
200,000
–
–
Net Taxable Income
600,000
550,000
750,000
750,000
Income tax on above
32,500
15,000
37,500
25,000
Education cess
1,300
600
1,500
1,000
Total tax liability (rounded off)
33,800
15,600
39,000
26,000
Tax Savings (INR) to employee
18,200
13,000
*Increased deduction u/s 80C to Rs 2 lakhs and reduced tax rate to 5% upto Rs 7.5 lakhs of income
Source: Grant Thornton Bharat
Presently, under the old tax regime, 5% tax is applicable on income above Rs 2,50,000 but upto Rs 5,00,000 and 20% tax rate is applicable on income above Rs 5,00,000. He recommends that the 5% tax rate should be applicable for income upto Rs 7,50,000 for female taxpayers. Similarly, under the new tax regime, 10% tax rate is applicable on income above Rs 5,00,000 but upto Rs 7,50,000. This should also be 5% for income upto Rs 7,50,000 for female taxpayers.
“Further, the government should also increase the Section 80C deduction limit from Rs 1.5 lakhs to Rs 2 lakhs. This move would certainly help the females of our county in building an independent future for themselves by having more disposable income in their hands,” he adds.
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