Changes in ITR Forms for AY 2025-26: Essential Insights for Senior Citizens
Filing income tax returns can become confusing, especially with ongoing changes in ITR forms. Senior citizens might find it more challenging to manage documentation, adapt to evolving tax regulations, and tackle digital processes.
This year (for the financial year 2025-26), the Central Board of Direct Taxes (CBDT) has implemented notable modifications to the ITR forms for the financial year 2024-25 (Assessment Year – AY 2025–26). These alterations serve two primary objectives:
Here are the highlights seniors should pay attention to:
1) LTCG Provision in ITR-1
Previously, even minor capital gains required taxpayers to bypass the straightforward ITR-1 (Sahaj) form in favor of the more intricate ITR-2. This year marks a significant change.
Senior citizens can now utilize ITR-1 for declaring long-term capital gains (LTCG) of up to Rs 1.25 lakh from selling listed equity shares or equity mutual funds (as per Section 112A of the Income Tax Act), provided they do not have any capital losses to offset or carry forward. This development is set to benefit retirees engaging modestly in the stock market.
“Many older taxpayers tend to invest in mutual funds or shares just enough to outpace inflation. Allowing them to utilize ITR-1 for minor LTCG revenues reduces unnecessary complications,” states Shefali Mundra, Tax Expert at Clear Tax.
Additionally, the forms include dropdown options for deductions under popular sections like 80C (investments), 80GG (rent expenses), and others, aiding in accurate data entry. While this leads to more detailed input during the filing process, it may help minimize mistakes that could prompt unwelcome notices or discrepancies later.
3) ITR Forms for Complex Financial Situations
For those with multifaceted finances, such as multiple properties, sizeable capital gains, or foreign assets, the necessity to file ITR-2 or ITR-3 remains unchanged.
However, individuals opting for ‘presumptive taxation’ under Sections 44AD, 44ADA, or 44AE (commonly applicable to professionals and small business owners) can continue to use ITR-4 (Sugam).
“Taxpayers earning LTCG up to Rs 1.25 lakh from listed equity shares or equity-oriented mutual funds under Section 112A can access the simplified ITR-4 forms, as long as they don’t carry forward any capital losses,” Mundra explains.
4) Exemption from Filing for Certain Seniors Aged 75 and Above
An important point that remains unchanged is the exemption granted under Section 194P. Seniors aged 75 and older with income limited to pensions and interest from a single bank are exempt from filing ITRs. They simply need to submit a declaration (Form 12BBA) to their bank, which will manage tax withholdings on their behalf.
The income tax department aims to streamline the process for senior citizens, especially those with basic income sources. For seniors handling their returns this year, the key enhancement is the permission to utilize simpler ITR-1 or ITR-4 forms, even with minor capital gains, thus alleviating the complexities of annual tax filing.
Make sure to review any TDS details carefully and make use of the dropdowns to minimize errors.
Mundra concludes, “These modifications aim to lessen the filing burden and enhance compliance for senior citizens while ensuring accurate data reporting for the Income Tax Department.”
Senior citizens have various ways to save on taxes in the year 2024. They can benefit from a higher tax exemption limit, deductions under Section 80TTB, and the utilization of the standard deduction for tax filing purposes. By making investments in avenues such as health insurance premiums, Senior Citizen Savings Scheme, Public Provident Fund, National Savings Certificate, and tax-saving fixed deposits, they can effectively manage their taxes. Senior citizens are subject to specific income tax slabs, along with benefits and exemptions under the Income Tax Act. These exemptions include deductions under Section 80C, benefits under the Reverse Mortgage Scheme, and higher interest rates for bank deposits. The income tax for senior citizens is calculated based on their various sources of income, allowable deductions, and the applicable income tax slab. Additionally, they are required to file income tax returns to claim their tax refund and may be eligible for exemptions related to health insurance, pensions, and interest income from deposits.
1. Higher Tax Exemption Limit: Senior citizens aged 60-80 enjoy a higher exemption limit of Rs 3 lakh compared to Rs 2.5 lakh for those below 60. The exemption limit for senior citizen at age 80 and above is even higher, which is at Rs 5 lakh. This helps them to lower their taxable income.
2. Deductions Under Section 80TTB: Section 80TTB of the Income Tax Act (the Act) allows senior citizens to claim a savings deduction of up to Rs 50,000 per year on interest earned from deposits with banks, co-operative societies or post offices. This deduction exceeds the Rs 1.5 lakh deduction available under Section 80C.
3. Utilize the Standard Deduction: Senior citizens can benefit from the standard deduction of Rs 50,000, which was introduced in the Budget 2020. It applies to pensioners even if they aren’t employed, helping ease the tax burden.
By making investments
4. Health Insurance Premiums: Senior citizens can avail higher deductions for health insurance premiums under Section 80D. They can deduct up to Rs 50,000 a year for health insurance premiums paid for themselves or their spouse, higher than the Rs 25,000 limit for those below 60.
Further, under section 80DDB, the maximum deduction for medical treatment of a dependent older than 60 years or a super senior citizen above 80 years is Rs 1 lakh for tax purposes.
5. Senior Citizen Savings Scheme (SCSS): It is a government-backed savings scheme specifically designed for senior citizens aged 60 years and above. It offers a secure and attractive investment avenue with a fixed interest rate, payable quarterly. The scheme offers a high-interest rate of 8.20% as of March’s end quarter and tax deductions up to Rs 1.5 lakh under Sec 80C.
6. Public Provident Fund (PPF): When you make contributions to PPF account, you become eligible for tax deductions under Section 80C of the Act. The interest earned and the maturity proceeds are tax-free, making PPF a tax-efficient savings instrument. You can secure investment with guaranteed returns of 7.1% as of March end quarter, tax-deductible contributions (Rs 1.5 lakh under Sec 80C), and a 15-year lock-in for long-term wealth creation.
7. National Saving Certificate (NSC): NSC entails relatively low risk and has a tenure of up to 5 years. With annual compounding, the interest accrues and is disbursed to the investor and the principal upon maturity without any upper limit. Tax benefits are accessible under Section 80C of the Income Tax Act, permitting deductions each year when the interest is reinvested. However, the sole taxable element is the final payout.
8. Tax-saving Fixed Deposits: Senior citizens can also invest in regular fixed deposits offered by banks. These fixed deposits typically have a lock-in period of five years and provide tax benefits under Section 80C, similar to other tax-saving instruments. While the interest earned on these deposits is taxable, senior citizens can benefit from higher interest rates than regular depositors.
With these investment avenues, senior citizens can effectively manage their taxes and save more in their golden years. However, it’s always good to consult a tax consultant or financial advisor to help you understand these exemptions better and plan your taxes optimally.
Income Tax Slab for Senior & Super Senior Citizen AY 2024-25
There are multiple ways in which a senior citizen can earn his/her income. It can either be in the form of pension, interest on savings, rental income, fixed deposits, reverse mortgage, and so on. These incomes are taxable according to the Income Tax Act.
Note: As per the Interim Union Budget FY 2023-24, no changes have been made to the tax slabs for senior citizens and super senior citizens for AY 2024-25.
Income Tax Calculation for Senior Citizens FY 2024-25
The income tax for senior citizens is calculated based on the basic salary, house rent allowance, fixed allowances, and other sources of income. However, the senior citizen receives higher exemption limit compared to individuals who are below 60 years old.
In order to calculate the income tax for a senior citizen, all the income is taken into consideration along with the allowable deductions and the income tax slab for FY 2024-25. Once you have all the details, the tax calculator can be used to determine your taxable income.
Under this new tax regime, there is no higher tax exemption limit for senior citizens (between the age of 60 and 80) or for super senior citizens (above the age of 80). Given below are the various tables for the Income Tax Slabs for the FY 2024-25 under the new tax regime:
Senior and Super Senior Citizens Income Tax Slabs for FY 2024-25 (New Tax Regime)
Tax applicable for individuals over 60 years and under 80 years
Income Tax Slab for Senior Citizens (Old Tax Regime)
Income Slab
Income Tax Rate
Up to Rs. 3,00,000
Nil
3,00,001 to 5,00,000
5%
5,00,001 to 10,00,000
20%
Above 10,00,000
30%
Income Tax Slab for Super Senior Citizens (Old Tax Regime)
Income Slab
Income Tax Rate
Up to Rs. 5,00,000
Nil
5,00,001 to 10,00,000
20%
Above 10,00,000
30%
Tax Calculation for Senior Citizens above 60 years
In case senior citizens want to calculate the amount of tax that must be paid, the income that is generated from all sources must be added. As per the slabs under the old income tax slabs the below-mentioned exemptions and deductions are allowed:
Sections
Deductions
Section 80C
Up to Rs.1.5 lakh can be claimed under the below-mentioned investments: National Savings Certificate, Senior Citizen Savings Scheme, Life Insurance Premium, Public Provident Fund, Equity Linked Savings Scheme, 5-year Fixed Deposit.
Section 80CCC
Rs.50,000 can be claimed under Section 80CCD(1B) and an additional deduction can be claimed under Section 80CCD(2)
Section 80D
Up to Rs.50,000 can be claimed.
Section 80DD
Depending on the disability, up to Rs.1.25 lakh can be claimed.
Senior citizens (Indian residents) do not have to pay tax in case they are earning an interest of up to Rs.50,000 in a financial year. The benefit is provided under Section 80TTA. Form 15H must be submitted when the ITR is filed.
Over and above that, there is a deduction of up to Rs.50,000 on the interest from post office deposits and fixed deposits.
Banks will take Tax Deducted at Source (TDS) from the interest income of such sources only if it is more than Rs.50,000 for the financial year.
For total income that is below the tax exemption limit, Form 15H can be submitted to the bank requesting that TDS is not deducted from that financial year. This interest exemption falls under Section 80TTB.
Senior citizens do not have to pay advance tax during the year as they do not have business income. They only have to pay the Self-Assessment (SA) Tax which is done after calculation of the final tax liability for the financial year.
Reverse mortgage
Senior citizens get special benefits under the reverse mortgage scheme. Under this scheme, their property value can be monetised to get Equated Monthly Installments (EMIs) in return which can supplement their income. This monthly amount that is received by senior citizens is exempt from tax on the side of the senior citizen.
Income Tax Filing for Senior Citizens
The senior citizens are required to file the income tax return to claim their tax refund. The following Income Tax Return (ITR) forms are required to be filled by the senior citizens:
Income from the other sources (includes winning from horse racing and lottery)
Incidents where the income of another individual, such as spouse or other member has to be combined with the income of the individual
Senior Citizens Tax Exemptions
A senior citizen is an individual resident who is 60 years old or more but below 80 years as on the last day of the previous year. Senior citizens at source of income include pension, rental income, interest on savings, fixed deposits, senior citizen saving scheme, reverse mortgage, and post office scheme.
Health Insurance: Deductions of up to Rs.50,000 per annum can be claimed by senior citizens towards their health insurance premium and/or medical expenses under Section 80D. In the case of dependent seniors, a deduction of up to Rs.1 lakh can be claimed for critical illnesses that have been specified previously. This falls under Section 80DDB.
Pension: For pensions there is a standard deduction of Rs.50,000 per year. This is for pensions in the form of annuity payments which are taxable just like the salaried income. It falls under Section 80D.
Interest Income from Deposits: Maximum of up to Rs.50,000 per annum is Deducted under Section 80TTB.
According to a Central Board of Direct Taxes directive, cases of senior citizens cannot be scrutinised unless an assessment is necessary on the basis of credible information.
Income Tax Calculation for Senior Citizens FY 2024-25
The income tax for senior citizens is calculated based on the basic salary, house rent allowance, fixed allowances, and other sources of income. However, the senior citizen receives higher exemption limit compared to individuals who are below 60 years old.
In order to calculate the income tax for a senior citizen, all the income is taken into consideration along with the allowable deductions and the income tax slab for FY 2024-25. Once you have all the details, the tax calculator can be used to determine your taxable income.
Under this new tax regime, there is no higher tax exemption limit for senior citizens (between the age of 60 and 80) or for super senior citizens (above the age of 80). Given below are the various tables for the Income Tax Slabs for the FY 2024-25 under the new tax regime:
Senior and Super Senior Citizens Income Tax Slabs for FY 2024-25 (New Tax Regime)
Up to Rs.1.5 lakh can be claimed under the below-mentioned investments: National Savings Certificate, Senior Citizen Savings Scheme, Life Insurance Premium, Public Provident Fund, Equity Linked Savings Scheme, 5-year Fixed Deposit.
Section 80CCC
Rs.50,000 can be claimed under Section 80CCD(1B) and an additional deduction can be claimed under Section 80CCD(2)
Senior citizens (Indian residents) do not have to pay tax in case they are earning an interest of up to Rs.50,000 in a financial year. The benefit is provided under Section 80TTA. Form 15H must be submitted when the ITR is filed.
Over and above that, there is a deduction of up to Rs.50,000 on the interest from post office deposits and fixed deposits.
Banks will take Tax Deducted at Source (TDS) from the interest income of such sources only if it is more than Rs.50,000 for the financial year.
For total income that is below the tax exemption limit, Form 15H can be submitted to the bank requesting that TDS is not deducted from that financial year. This interest exemption falls under Section 80TTB.
Senior citizens do not have to pay advance tax during the year as they do not have business income. They only have to pay the Self-Assessment (SA) Tax which is done after calculation of the final tax liability for the financial year.
The senior citizens are required to file the income tax return to claim their tax refund. The following Income Tax Return (ITR) forms are required to be filled by the senior citizens:
Income from the other sources (includes winning from horse racing and lottery)
Incidents where the income of another individual, such as spouse or other member has to be combined with the income of the individual
Senior Citizens Tax Exemptions
A senior citizen is an individual resident who is 60 years old or more but below 80 years as on the last day of the previous year. Senior citizens at source of income include pension, rental income, interest on savings, fixed deposits, senior citizen saving scheme, reverse mortgage, and post office scheme.
Health Insurance: Deductions of up to Rs.50,000 per annum can be claimed by senior citizens towards their health insurance premium and/or medical expenses under Section 80D. In the case of dependent seniors, a deduction of up to Rs.1 lakh can be claimed for critical illnesses that have been specified previously. This falls under Section 80DDB.
Interest Income from Deposits: Maximum of up to Rs.50,000 per annum is Deducted under Section 80TTB.
According to a Central Board of Direct Taxes directive, cases of senior citizens cannot be scrutinised unless an assessment is necessary on the basis of credible information.
FAQs on Income Tax for Senior Citizens
What are the deductions for senior citizens in AY 2024-25?The deduction amount for senior citizen is Rs.1 lakh and Rs. 40,000 for Non-Senior Citizen taxpayers.
How much is the income tax limit for senior citizens?Up to Rs. 3,00,000 in a financial would be tax free for Senior Citizens between 60 to 80 years of age.
What is the oldest age at which seniors must file an income tax return?This is based on the elder citizen’s basic income rather than their age (this includes rent allowances, fixed and other sources of income). The exemption cap for senior citizens, however, is higher, at Rs. 3 lakh and Rs. 5 lakhs, respectively.
What is the usual senior tax deduction?The standard deduction for seniors is Rs.50,000, as per the most current revisions to the Income Tax Act.
How much may an elderly person earn tax-free?A senior can earn up to 3 lakh rupees tax-free, and super seniors over the age of 80 can make up to 5 lakh rupees tax-free.
What is the maximum tax advantage for senior citizen health insurance?Older persons who have selected a valid health insurance plan and are making the appropriate yearly payment may be eligible for a tax credit of up to Rs.55,000 (this includes annual health tests) under Section 80D of the Income Tax Act.
What does marginal relief mean?When the amount of the surcharge payable exceeds the increased income that renders the person liable for the surcharge, marginal relief is given. Surcharge payments cannot exceed amounts exceeding Rs.50 lakhs, Rs.1 million, Rs.2 million, or Rs.5 million in income, correspondingly.
Benefits to Senior and Super Senior Citizen under Income Tax
Read this
Senior Citizens and Super Senior Citizens for AY 2024-2025
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).
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
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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.
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.
Section 194P of the Income-tax Act,1961 was introduced in Budget 2021 to provide conditional relief to senior citizens above the age of 75 years from filing the income tax return. Section 139 of the Income Tax Act governs the filing of income tax returns by every individual with income above the basic exemption limit.
However, Union Budget 2021, to provide relief in terms of compliance burden for filing returns, exempted senior citizens above 75 years of age from filing the income tax return, subject to the following conditions:
Conditions for exemption under section 194P
Senior citizens should be of age 75 years or above.
Senior citizens should be ‘Resident’ in the previous year.
He must have pension income and interest income from a bank account (savings or deposits) only. Interest income must be accrued/earned from the same bank in which he is receiving his pension.
The senior citizen will submit a declaration containing some details (mentioned below) to the bank.
The bank must be specified, and a ‘specified bank’ is a banking company as notified by the Central Government. Such banks will be responsible for the TDS deduction of senior citizens after considering the deductions under Chapter VI-A and rebate under 87A.
Once the specified bank, as mentioned above, deducts tax for senior citizens above 75 years of age, there will be no requirement to furnish income tax returns by senior citizens.
Filing a declaration by a senior citizen
The specified bank, as mentioned above, shall deduct TDS based on a declaration submitted by the senior citizen to the bank. The declaration should contain the below-mentioned details :
Confirmation from the senior citizen of having only pension and interest income
How will the taxable income be calculated under the new section?
A senior citizen must submit a declaration using Form No. 12BBA. Once the older citizen has filed the declaration, the bank will compute the gross total income (pension plus interest income). To calculate net taxable income, the bank will also consider the deductions, tax exemptions, and rebates available to elderly citizens under Section 87A. After deductions and rebates, the bank would now deduct TDS for older persons.
The bank will request proof of deductions and tax exemptions that the senior person is entitled to when filing the declaration. If they choose the previous income tax regime, this will be required. If the older citizen chooses the new income tax regime, no investment proof will be required.
Benefits to senior citizens under 194P
Upon collection of deduction details, the specified bank calculates the net taxable income, deducts the calculated tax in the form of TDS under section 194P, and reports it to the department. The TDS amount will be reflected in Form 26AS just like any other TDS amount.
Senior citizens aged 75 years or more having pension income and interest income from the same bank where such pension income is received, not having any other income other than the mentioned 2 income are exempted from filing income tax returns upon submission of declaration in Form 12BBA to the bank.
Once the taxpayer has filed the declaration, the bank calculates net taxable income after considering the deductions, tax exemptions, and rebates available to elderly citizens under Section 87A, then applies the beneficial tax regime to the taxpayer to arrive at the TDS to be made u/s 194P.
Which tax regime will be applied while deducting TDS u/s 194P?
Once the taxpayer has filed the declaration, the bank calculates net taxable income after considering the deductions, tax exemptions, and rebates available to elderly citizens under Section 87A, then applies the beneficial tax regime to the taxpayer to arrive at the TDS to be made u/s 194P.
What are the deductions limit u/s 80C and 80D for Senior citizens?
For the policy taken for Self & Family + Parents (above 60 years)
Rs 1,00,000
What is Form 15H for senior citizens?
Form 15H are self-declaration form that an individual submits to the payer requesting not to deduct TDS on the income as their income is below the basic exemption limit.
For this, providing PAN is compulsory. Some banks allow you to submit these forms online through the bank’s website.
What is the age limit for 194P?
Relaxation from filing the ITR is available to resident senior citizens aged 75 years or older.
The Income Tax filing cycle has started for the financial year 2024 and assessment year 2024-25. Like all jobholders, senior citizens are also required to pay income taxes and file returns.
However, income tax rules offer additional tax benefits to senior citizens. To claim these benefits, the individual must be of the age of 60 years or above but less than 80 years at any time during the respective year. Taxpayers above 80 years are marked as super senior citizens.
As per the Income-Tax Act, 1961, 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.
For the financial year 2023-24, tax-saving investments made by March 31, 2024, will be considered for income tax returns. The new tax regime excludes benefits like Section 80C for medical insurance premiums, interest income. The old regime still offers benefits under different sections.
Here are the top points:
The taxable income for senior citizens is subject to specific tax rules and exemptions. The taxable income is calculated for senior citizens as follows:
1. Income Sources: Consider all sources of income, including salary, pension, interest income from savings accounts, fixed deposits, rent from property, capital gains from investments, etc.
2. Exemptions and Deductions: Senior citizens are eligible for higher deduction limits as well exemption benefits compared to other taxpayers. Accordingly, senior citizens would be required to take into consideration such higher limits for deductions and exemptions while calculating their taxable income.
For instance, additional deductions under Section 80D (health insurance premium), Section 80TTB (interest income from deposits), benefit of deduction u/s 80C (for investment in Senior Citizens Savings Scheme) etc., are available for senior citizens.
3. Calculation of Taxable Income: By subtracting the eligible exemptions and deductions from the total income, we will get the taxable income. For example, if a senior citizen has a total income of Rs 10,00,000, and avails of the full benefit of the basic exemption limit of Rs 3,00,000 and deductions under various sections amounting to Rs 50,000, the taxable income would be Rs 6,50,000.
4. Tax Calculation: Once the taxable income is determined, apply the applicable tax rates to calculate the tax liability. It is pertinent to note that senior citizens and super senior citizens enjoy a higher basic exemption limit of Rs 3 lakhs and Rs 5 lakhs, respectively.
However, no such benefit of higher basic exemption limit is available under the new tax regime. The applicable tax rates for Financial Year 2023-24 under the old tax regime and new tax regime (default) are as follows:
Income Slabs
Old Tax Regime
Income Slabs
New Tax Regime (Default tax regime)
Tax Rate for Senior Citizens(60-80 years)
Tax Rate for Super Senior Citizens(80 years and above)
Tax Rate for Senior Citizens & Super Senior Citizens
Up to Rs 3,00,000
Nil
Nil
Up to Rs 3,00,000
Nil
Rs3,00,001 to Rs 5,00,000
5%
Nil
Rs3,00,001 to Rs 6,00,000
5%
Rs 5,00,001 to Rs 10,00,000
20%
20%
Rs 6,00,001 to Rs 9,00,000
10%
Above Rs 10,00,000
30%
30%
Rs 9,00,001 to Rs 12,00,000
15%
Rs 12,00,001 to Rs 15,00,000
20%
Above Rs 15,00,000
30%
5. Rebate u/s 87A: Calculate the applicable rebate under Section 87A. Senior citizens would be eligible for a rebate under Section 87A if their total income is up to a specified limit (Rs. 5 lakhs under the old tax regime and Rs. 7 lakhs under the new tax regime). Such rebate would be lower of the actual tax amount or Rs. 12,500 (enhanced to Rs. 25,000 in case of new tax regime).
6. Surcharge & Health and Education Cess: The applicable surcharge, if any and health and education cess @ 4% would be computed to arrive at the final tax liability. In case there are any interest consequences or penalty/ late filing fees, the same would be added to the tax liability amount.
Taxability of Pension
The taxability of Pension would depend upon the nature of Pension as follows:
> Government Pensions: Commuted Pension income (i.e. receivable in lump sum immediately) from the government is fully exempt not subject to any tax rates. Uncommuted Pension income would be taxable under the head “Salaries” and is subject to the applicable marginal slab rates.
> Pension from other than Government (Private Sector Company): Commuted Pension income received from private companies is taxable under the head “Salaries” and is subject to the applicable tax rates. However, an exemption u/s 10(10A) is provided as follows:
> One-third of the amount of commuted pension which the employee would have received had he commuted the whole of pension shall be eligible for exemption provided such employee is also in receipt of gratuity.
> One-half of the amount of commuted pension which the employee would have received had he commuted the whole of pension shall be eligible for exemption in case where such employee has not received any income in the nature of gratuity.
> Uncommuted Pension income would be taxable under the head “Salaries” and is subject to the applicable marginal slab rates.
Tax regimes for seniors with NPS
> Old tax regime allows various deductions and exemptions which otherwise may not be allowed under the new tax regime u/s 115BAC. If an individual follows old tax regime, then he is eligible for the following deductions pertaining to the pension income. A taxpayer derives the following benefits from NPS:
Tax benefits on Partial withdrawal from NPS account
Taxpayer would be eligible for tax exemption on the amount withdrawn upto 25% of the self contribution, on such terms and conditions as may be specified by PFRDA u/s 10(12B).
Tax benefit on Lumpsum withdrawal
Taxpayer would be eligible for tax exemption on lumpsum withdrawal of 60% of accumulated pension wealth upon attaining the age of 60 or superannuation under section 10(12A).
Senior citizens have various ways to save on taxes in the year 2024. They can benefit from a higher tax exemption limit, deductions under Section 80TTB, and the utilization of the standard deduction for tax filing purposes. By making investments in avenues such as health insurance premiums, Senior Citizen Savings Scheme, Public Provident Fund, National Savings Certificate, and tax-saving fixed deposits, they can effectively manage their taxes. Senior citizens are subject to specific income tax slabs, along with benefits and exemptions under the Income Tax Act. These exemptions include deductions under Section 80C, benefits under the Reverse Mortgage Scheme, and higher interest rates for bank deposits. The income tax for senior citizens is calculated based on their various sources of income, allowable deductions, and the applicable income tax slab. Additionally, they are required to file income tax returns to claim their tax refund and may be eligible for exemptions related to health insurance, pensions, and interest income from deposits.
1. Higher Tax Exemption Limit: Senior citizens aged 60-80 enjoy a higher exemption limit of Rs 3 lakh compared to Rs 2.5 lakh for those below 60. The exemption limit for senior citizen at age 80 and above is even higher, which is at Rs 5 lakh. This helps them to lower their taxable income.
2. Deductions Under Section 80TTB: Section 80TTB of the Income Tax Act (the Act) allows senior citizens to claim a savings deduction of up to Rs 50,000 per year on interest earned from deposits with banks, co-operative societies or post offices. This deduction exceeds the Rs 1.5 lakh deduction available under Section 80C.
3. Utilize the Standard Deduction: Senior citizens can benefit from the standard deduction of Rs 50,000, which was introduced in the Budget 2020. It applies to pensioners even if they aren’t employed, helping ease the tax burden.
By making investments
4. Health Insurance Premiums: Senior citizens can avail higher deductions for health insurance premiums under Section 80D. They can deduct up to Rs 50,000 a year for health insurance premiums paid for themselves or their spouse, higher than the Rs 25,000 limit for those below 60.
Further, under section 80DDB, the maximum deduction for medical treatment of a dependent older than 60 years or a super senior citizen above 80 years is Rs 1 lakh for tax purposes.
5. Senior Citizen Savings Scheme (SCSS): It is a government-backed savings scheme specifically designed for senior citizens aged 60 years and above. It offers a secure and attractive investment avenue with a fixed interest rate, payable quarterly. The scheme offers a high-interest rate of 8.20% as of March’s end quarter and tax deductions up to Rs 1.5 lakh under Sec 80C.
6. Public Provident Fund (PPF): When you make contributions to PPF account, you become eligible for tax deductions under Section 80C of the Act. The interest earned and the maturity proceeds are tax-free, making PPF a tax-efficient savings instrument. You can secure investment with guaranteed returns of 7.1% as of March end quarter, tax-deductible contributions (Rs 1.5 lakh under Sec 80C), and a 15-year lock-in for long-term wealth creation.
7. National Saving Certificate (NSC): NSC entails relatively low risk and has a tenure of up to 5 years. With annual compounding, the interest accrues and is disbursed to the investor and the principal upon maturity without any upper limit. Tax benefits are accessible under Section 80C of the Income Tax Act, permitting deductions each year when the interest is reinvested. However, the sole taxable element is the final payout.
8. Tax-saving Fixed Deposits: Senior citizens can also invest in regular fixed deposits offered by banks. These fixed deposits typically have a lock-in period of five years and provide tax benefits under Section 80C, similar to other tax-saving instruments. While the interest earned on these deposits is taxable, senior citizens can benefit from higher interest rates than regular depositors.
With these investment avenues, senior citizens can effectively manage their taxes and save more in their golden years. However, it’s always good to consult a tax consultant or financial advisor to help you understand these exemptions better and plan your taxes optimally.
Income Tax Slab for Senior & Super Senior Citizen AY 2024-25
There are multiple ways in which a senior citizen can earn his/her income. It can either be in the form of pension, interest on savings, rental income, fixed deposits, reverse mortgage, and so on. These incomes are taxable according to the Income Tax Act.
Note: As per the Interim Union Budget FY 2023-24, no changes have been made to the tax slabs for senior citizens and super senior citizens for AY 2024-25.
Income Tax Calculation for Senior Citizens FY 2024-25
The income tax for senior citizens is calculated based on the basic salary, house rent allowance, fixed allowances, and other sources of income. However, the senior citizen receives higher exemption limit compared to individuals who are below 60 years old.
In order to calculate the income tax for a senior citizen, all the income is taken into consideration along with the allowable deductions and the income tax slab for FY 2024-25. Once you have all the details, the tax calculator can be used to determine your taxable income.
Under this new tax regime, there is no higher tax exemption limit for senior citizens (between the age of 60 and 80) or for super senior citizens (above the age of 80). Given below are the various tables for the Income Tax Slabs for the FY 2024-25 under the new tax regime:
Senior and Super Senior Citizens Income Tax Slabs for FY 2024-25 (New Tax Regime)
Tax applicable for individuals over 60 years and under 80 years
Income Tax Slab for Senior Citizens (Old Tax Regime)
Income Slab
Income Tax Rate
Up to Rs. 3,00,000
Nil
3,00,001 to 5,00,000
5%
5,00,001 to 10,00,000
20%
Above 10,00,000
30%
Income Tax Slab for Super Senior Citizens (Old Tax Regime)
Income Slab
Income Tax Rate
Up to Rs. 5,00,000
Nil
5,00,001 to 10,00,000
20%
Above 10,00,000
30%
Tax Calculation for Senior Citizens above 60 years
In case senior citizens want to calculate the amount of tax that must be paid, the income that is generated from all sources must be added. As per the slabs under the old income tax slabs the below-mentioned exemptions and deductions are allowed:
Sections
Deductions
Section 80C
Up to Rs.1.5 lakh can be claimed under the below-mentioned investments: National Savings Certificate, Senior Citizen Savings Scheme, Life Insurance Premium, Public Provident Fund, Equity Linked Savings Scheme, 5-year Fixed Deposit.
Section 80CCC
Rs.50,000 can be claimed under Section 80CCD(1B) and an additional deduction can be claimed under Section 80CCD(2)
Section 80D
Up to Rs.50,000 can be claimed.
Section 80DD
Depending on the disability, up to Rs.1.25 lakh can be claimed.
Senior citizens (Indian residents) do not have to pay tax in case they are earning an interest of up to Rs.50,000 in a financial year. The benefit is provided under Section 80TTA. Form 15H must be submitted when the ITR is filed.
Over and above that, there is a deduction of up to Rs.50,000 on the interest from post office deposits and fixed deposits.
Banks will take Tax Deducted at Source (TDS) from the interest income of such sources only if it is more than Rs.50,000 for the financial year.
For total income that is below the tax exemption limit, Form 15H can be submitted to the bank requesting that TDS is not deducted from that financial year. This interest exemption falls under Section 80TTB.
Senior citizens do not have to pay advance tax during the year as they do not have business income. They only have to pay the Self-Assessment (SA) Tax which is done after calculation of the final tax liability for the financial year.
Reverse mortgage
Senior citizens get special benefits under the reverse mortgage scheme. Under this scheme, their property value can be monetised to get Equated Monthly Installments (EMIs) in return which can supplement their income. This monthly amount that is received by senior citizens is exempt from tax on the side of the senior citizen.
Income Tax Filing for Senior Citizens
The senior citizens are required to file the income tax return to claim their tax refund. The following Income Tax Return (ITR) forms are required to be filled by the senior citizens:
Income from the other sources (includes winning from horse racing and lottery)
Incidents where the income of another individual, such as spouse or other member has to be combined with the income of the individual
Senior Citizens Tax Exemptions
A senior citizen is an individual resident who is 60 years old or more but below 80 years as on the last day of the previous year. Senior citizens at source of income include pension, rental income, interest on savings, fixed deposits, senior citizen saving scheme, reverse mortgage, and post office scheme.
Health Insurance: Deductions of up to Rs.50,000 per annum can be claimed by senior citizens towards their health insurance premium and/or medical expenses under Section 80D. In the case of dependent seniors, a deduction of up to Rs.1 lakh can be claimed for critical illnesses that have been specified previously. This falls under Section 80DDB.
Pension: For pensions there is a standard deduction of Rs.50,000 per year. This is for pensions in the form of annuity payments which are taxable just like the salaried income. It falls under Section 80D.
Interest Income from Deposits: Maximum of up to Rs.50,000 per annum is Deducted under Section 80TTB.
According to a Central Board of Direct Taxes directive, cases of senior citizens cannot be scrutinised unless an assessment is necessary on the basis of credible information.
The content provides information on 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.
Additionally, it details the Tax Slabs for AY 2024-25, Investments/Payments/Incomes eligible for tax benefits, and enhanced benefits for Senior/Super Senior Citizens. The document covers various deductions under Chapter VI-A of the Income Tax Act and elucidates specific tax benefits applicable to Senior Citizens.
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
Disclaimer: The content on this page is only to give an overview and general guidance and is not exhaustive. For complete details and guidelines please refer Income Tax Act, Rules and Notifications
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.
Note: Section 194P of the Income Tax Act, 1961 provides conditions for exempting Senior Citizens from filing income tax returns aged 75 years and above. Conditions for exemption are: – Senior Citizen should be of age 75 years or above – Senior Citizen should be ‘Resident’ in the previous year – Senior Citizen has pension income and interest income only & interest income accrued / earned from the same specified bank in which he is receiving his pension – The senior citizen will submit a declaration to the specified bank. – The bank is a ‘specified bank’ as notified by the Central Government. Such banks will be responsible for the TDS deduction of senior citizens after considering the deductions under Chapter VI-A and rebate under 87A. – Once the specified bank, as mentioned above, deducts tax for senior citizens above 75 years of age, there will be no requirement to furnish income tax returns by senior citizens.
Section 194P is applicable from 1st April 2021.
1. ITR-1 (SAHAJ) – Applicable for Individual
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.
Salary/ Pension
One House Property
Other sources (Interest, Family Pension, Dividend etc.)
Agricultural Income up to ₹ 5,000
Note: ITR-1 cannot be used by a person who: (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 tax has been deducted u/s 194N (g) is a person in whose case payment or deduction of tax has been deferred on ESOP.
(h)has total income exceeding Rs. 50 lakhs.
2. ITR-2 – Applicable for Individual and HUF
This return is applicable for Individual and Hindu Undivided Family (HUF).
Not having income under the head Profits or Gains of Business or Profession
Who is not eligible for filing ITR-1
3. ITR-3 – Applicable for Individual and HUF
This return is applicable for Individual and Hindu Undivided Family (HUF).
Having income under the head Profits or Gains of Business or Profession
Who is not eligible for filing ITR-1, 2 or 4
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.)
Agricultural Income up to ₹ 5,000
Income from Business / Profession computed on presumptive basis u/s 44AD / 44ADA / 44AE
Note: ITR-4 cannot be used by a person who:
(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.
5. Form 26AS
Provided by
Details provided in the form
Income Tax Department (It is available on e-Filing Portal:Login > e-File> Income Tax return > View form 26AS)
Tax Deducted / Collected at Source
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.
6. AIS- Annual Information Statement
Provided by
Details provided in the form
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.
10. Form 3CEB
Submitted by
Details provided in the form
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.
AGE GROUP 60+
Tax rates for Senior Citizen i.e. Resident Individual, 60 years or more but less than 80 years of age at anytime during the previous year:
1. The rates of Surcharge under the tax regimes are as under:
Total Income
Old Tax Regime
New Tax Regime
Rate of Surcharge Applicable
Up to Rs. 50 Lakh
Nil
Nil
Above Rs. 50 Lakh and up to Rs. 1 Crore
10%
10%
Above Rs. 1 Crore and up to Rs. 2 Crore
15%
15%
Above Rs. 2 Crore and up to Rs. 5 Crore
25%
25%
Above Rs. 5 Crore
37%
25%
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:
Total Income
Old Tax Regime
New Tax Regime
Rebate under Section 87A Applicable
Up to Rs. 5 Lakh
Tax rebate up to Rs.12,500 is applicable for resident individuals if the total income does not exceed Rs 5,00,000 (not applicable for NRIs
Tax rebate up to Rs.25,000 is applicable for resident individuals if the total income does not exceed Rs 7,00,000 (not applicable for NRIs
From 5 Lakhs to 7 Lakhs
NIL
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
These Deductions will not be available to a taxpayer opting for the New Tax Regime u/s 115 BAC, except for deduction u/s 80CCD(2) which will be allowable under New Tax Regime as well.
80C, 80CCC, 80CCD (1)
Deduction towards payments made to
80C
Life Insurance Premium
Provident Fund
Subscription to certain equity shares
Tuition Fees
National Savings Certificate
Housing Loan Principal
Other various items
80CCC
Annuity plan of LIC or other insurer towards Pension Scheme
80CCD (1)
Pension Scheme of Central Government
Combined deduction limit of ₹ 1,50,000
80CCD (1B)
Deduction towards payments made to Pension Scheme of Central Government, excluding deduction claimed under 80CCD (1).
Deduction Limit of ₹ 50,000
80CCD (2)
Deduction towards contribution made by an employer to the Pension Scheme of Central Government
If Employer is a PSU, State Government or others – Deduction limit of 10% of salary
If Employer is Central Government – Deduction limit of 14% of salary
80D
Deduction towards payments made to Health Insurance Premium & Preventive Health check up
For Self / Spouse or Dependent Children –
₹ 50,000 if any person is a Senior Citizen
₹ 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)
80E
Deduction towards interest payments made on loan for higher education of Self or relative.
Total amount paid towards interest on loan taken
80EE
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
80G
Deduction towards Donations made to certain Funds, Charitable Institutions, etc.
Donation are eligible for deduction under the below categories:
Without any limit
100% deduction50% deduction
Subject to qualifying limit
100% deduction50% deduction
80GG
Deduction towards rent paid for house & applicable only for whom HRA is not part of Salary.
Least of the following shall be allowed as deduction:
Rent paid reduced by 10% of Total Income before this deduction
₹ 5,000 per month
25% of Total Income before this deduction
Note: Form 10BA to be filed for claiming this deduction
80GGA
Deduction towards Donations made for Scientific Research or Rural Development
Donation are eligible for deduction under the below categories:
Research Association or University, College or other Institution forScientific ResearchSocial Science or Statistical Research
Association or Institution for Rural DevelopmentConservation of Natural Resources or for Afforestation
PSU or Local Authority or an Association or Institution approved by the National Committee for carrying out any eligible project
Funds notified by Central Government forAfforestationRural Development
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
Deduction of total amount paid through any mode other than cash
80TTB
Deduction on interest received on deposits by Resident Senior Citizens
Deduction limit of ₹ 50,000
80U
Deductions for an individual taxpayer with Disability
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:
Super Senior Citizens (aged 80 years or more) have the option to submit their ITR using Form 1 or 4 in offline / paper mode. The e-Filing option also remains available to them.
Relief from payment of Advance Tax
As per Section 208, every person whose estimated tax liability for the year is ₹ 10,000 or more, shall pay his tax in advance, in the form of Advance Tax. But, Section 207 gives relief from payment of Advance Tax to a Resident Senior Citizen. Thus, a Resident Senior Citizen, not having any Income from Business or Profession, is not liable to pay Advance Tax.
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.
Also, u/s 194A of the Income Tax Act, no Tax is Deducted at Source (TDS) on interest payment of up to ₹ 50,000 by the bank, post office or co-operative bank to a Senior Citizen. This limit is to be computed for every bank individually.
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).
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.
Income tax relief for Senior Citizens: All the details
Section 80TTB
Section 80TTB of the Income Tax Actgives tax benefits for individuals 60 orolder, by offering a deduction of Rs50,000 on interest income generatedfrom various deposits.
Interest exceeding Rs 50,000 attractstax as per the applicable slab rate forsenior citizens. Interest income fromcompany fixed deposits orbonds/NCDs does not qualify for reliefunder Section 80TTB.
Income Tax Slab for Senior & Super Senior Citizen FY 2024-25: There are multiple ways in which a senior citizen can earn his/her income. It can either be in the form of pension, interest on savings, rental income, fixed deposits, reverse mortgage, and so on. These incomes are taxable according to the Income Tax Act.
Note: As per the Interim Union Budget FY2024-25, no changes have been made to the tax slabs for senior citizens and super senior citizens for FY 2024-25.
Income Tax Calculation for Senior Citizens FY 2024-25 The income tax for senior citizens is calculated based on the basic salary, house rent allowance, fixed allowances, and other sources of income. However, the senior citizen receives higher exemption limit compared to individuals who are below 60 years old.
Under this new tax regime, there is no higher tax exemption limit for senior citizens (between the age of 60 and 80) or for super senior citizens (above the age of 80). Given below are the various tables for the Income Tax Slabs for the FY 2024-25 under the new tax regime:
Senior and Super Senior Citizens Income Tax Slabs for FY 2024-25 (New Tax Regime)
Tax applicable for individuals over 60 years and under 80 years
Up to Rs.1.5 lakh can be claimed under the below-mentioned investments: National Savings Certificate, Senior Citizen Savings Scheme, Life Insurance Premium, Public Provident Fund, Equity Linked Savings Scheme, 5-year Fixed Deposit.
Section 80CCC
Rs.50,000 can be claimed under Section 80CCD(1B) and an additional deduction can be claimed under Section 80CCD(2)
Section 80D
Up to Rs.50,000 can be claimed.
Section 80DD
Depending on the disability, up to Rs.1.25 lakh can be claimed.
Senior citizens (Indian residents) do not have to pay tax in case they are earning an interest of up to Rs.50,000 in a financial year. The benefit is provided under Section 80TTA. Form 15H must be submitted when the ITR is filed.
Over and above that, there is a deduction of up to Rs.50,000 on the interest from post office deposits and fixed deposits.
Banks will take Tax Deducted at Source (TDS) from the interest income of such sources only if it is more than Rs.50,000 for the financial year.
For total income that is below the tax exemption limit, Form 15H can be submitted to the bank requesting that TDS is not deducted from that financial year. This interest exemption falls under Section 80TTB.
Senior citizens do not have to pay advance tax during the year as they do not have business income. They only have to pay the Self-Assessment (SA) Tax which is done after calculation of the final tax liability for the financial year.
The senior citizens are required to file the income tax return to claim their tax refund. The following Income Tax Return (ITR) forms are required to be filled by the senior citizens:
Income from the other sources (includes winning from horse racing and lottery)
Incidents where the income of another individual, such as spouse or other member has to be combined with the income of the individual
Senior Citizens Tax Exemptions
A senior citizen is an individual resident who is 60 years old or more but below 80 years as on the last day of the previous year. Senior citizens at source of income include pension, rental income, interest on savings, fixed deposits, senior citizen saving scheme, reverse mortgage, and post office scheme.
Health Insurance: Deductions of up to Rs.50,000 per annum can be claimed by senior citizens towards their health insurance premium and/or medical expenses under Section 80D. In the case of dependent seniors, a deduction of up to Rs.1 lakh can be claimed for critical illnesses that have been specified previously. This falls under Section 80DDB.
Pension: For pensions there is a standard deduction of Rs.50,000 per year. This is for pensions in the form of annuity payments which are taxable just like the salaried income. It falls under Section 80D.
Interest Income from Deposits: Maximum of up to Rs.50,000 per annum is Deducted under Section 80TTB.
According to a Central Board of Direct Taxes directive, cases of senior citizens cannot be scrutinised unless an assessment is necessary on the basis of credible information.
Section 80TTB of the Income Tax Act, 1961, introduced by the Finance Act 2019, provides certain benefits to senior citizens in the form of tax deductions. It allows them to claim a deduction of up to ₹50,000 on their income from interest earned on deposits held with banks, post offices, and cooperative societies.
Let us understand it in detail.
What is section 80TTB of the Income Tax Act?
Section 80TTB of the Income Tax Act governs the tax deductions available for senior citizens on the income earned from interest on deposits held with banks, post offices and cooperative societies. It is applicable to individuals who are aged 60 years or above and provides a deduction of up to ₹50,000 from the total income of such individuals.
This deduction is available only for the income that is taxable under the head “Income from other sources”. This section is beneficial for senior citizens who are unable to earn any other income or have limited other sources of income.
What are the eligibility criterion to avail the benefits under Section 80TTB?
The individual must be aged 60 years or more;
The individual must hold deposits with banks, post offices, or cooperative societies;
The income should be in the form of interest on such deposits;
The total income of the individual must not exceed ₹5 lakhs;
The amount of deduction should not exceed ₹50,000;
It is important to remember that interest received on savings accounts and fixed or recurring deposits kept with the aforementioned three sources will be taken into account for tax deduction purposes.
However, interest from corporate FDs and other schemes is not eligible for the aforementioned deduction. Bond and debenture interests is also not eligible for the deduction provided for in this section.
How is Section 80TTB different from Section 80TTA of the Income Tax Act?
Section 80TTB and Section 80TTA are both sections of the Income Tax Act, 1961. Section 80TTB provides a deduction of up to ₹50,000 on income from interest on deposits held in any account by senior citizens (i.e., persons above the age of 60). Furthermore, this deduction can be claimed irrespective of whether the individual is filing taxes or not.
On the other hand, Section 80TTA is applicable to all taxpayers, regardless of their age. It allows a deduction of up to ₹10,000 for interest earned on deposits held in savings accounts with banks, cooperative societies and post offices. This deduction can only be claimed when the individual is filing taxes. The key difference between section 80TTB and section 80TTA is that the former is available to only senior citizens whereas the latter is available to all taxpayers.
When submitting your IT returns, you can quickly compute your deduction under Section 80TTB. To start, figure out the interest you received on savings accounts, fixed deposits, recurring deposits, etc. for a specific fiscal year. These details must be entered under the “Income from other sources” category. If you choose Section 80TTB under deductions, your taxable income calculation would be directly lowered by Rs. 50,000.
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