Understanding Income Tax Slabs for Senior Citizens and Their Tax Exemptions

The Indian taxation system undergoes frequent revisions to cater to taxpayers' needs, with a notable transition between the old and new tax regimes. Amidst these changes, specific provisions are made to benefit senior and super-senior citizens.

Senior citizens, aged between 60 and 80, and super seniors, aged above 80, are categorised under the Income Tax Act for various exemptions and benefits. Understanding the intricacies of income tax slabs for senior citizens and their corresponding exemptions is crucial for effective financial planning.

So, let’s dive deeper into these tax regulations to ensure optimal financial management and compliance with tax laws.

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Income Tax Slabs and Rates as per Old Tax Regime

Senior and super-senior citizens receive income from various sources, such as pensions, capital gains, and rental income, making it essential to grasp the intricacies of their tax obligations.

The following table shows income tax slab for senior citizens for the assessment year 2024-25 as per the old tax regime:

In addition to the tax calculated above, individuals over 60 years of age will need to pay 4% of their income tax towards health and education. 

Read more: Income Tax Return Filing Opens for AY 2024-25

Income Tax Slabs and Rates as per New Tax Regime

The following table shows income tax slabs for senior and super-senior citizens for the assessment year 2024-25 (FY 2023-24) as per the new tax regime.

There is no change in health and education tax for either category. 

Read more: Important Changes W.R.T Liberalised Remittance Scheme (LRS) and Tax Collected at Source (TCS)

Tax Exemptions for Senior & Super-Senior Citizens

Numerous claims, deductions, and exemptions are available to individuals falling in senior and super citizens. The most attractive benefits they enjoy are mentioned as follows: 

1. Deductions on Medical Insurance Premiums

Medical insurance tax benefits and deductions are available under the old tax regime. Taxpayers can enjoy maximum tax benefits of ₹50,000 on medical insurance policies as per Section 80D. Moreover, they can enjoy a benefit of ₹1,00,000 on medical expenses.

These expenses should be related to specific conditions or diseases listed under the Income Tax Act. These claims are available under Section 80DDB.

2. Income Limit Exemption

If you are a senior citizen with an annual income below ₹3,00,000, you are exempt from paying income tax. This claim is available under both regimes. The income limit rises to ₹5,00,000 for super-senior citizens. 

3. Deductions Relating to Senior Citizens Savings Scheme

As per Section 80C, individuals in the senior citizens category can claim a maximum deduction of ₹1,50,000 on investments in the Senior Citizens Savings Scheme. However, these claims are only available in the old tax regime. 

4. Advance Tax Payment Benefit

Generally, taxpayers are required to pay advance tax if they earn income from any business or profession. However, senior citizens are exempt from paying this tax if they do not generate income from a business or profession. As a result, the authorities cannot charge interest on delays in advance tax payments.

5. Tax Rebate Under Section 87A

You can claim a rebate on your annual income if it does not exceed ₹5,00,000 (old tax regime) or ₹7,00,000 (new tax regime). The rebate amount is the lower of the income tax calculated and ₹12,500 (old tax regime)/ ₹25,000 (new tax regime). 

6. Section 80TTB Deductions

Senior citizens can claim and receive a maximum ₹50,000 on interest receipts from cooperative banks, savings bank deposits, post office deposits, etc. Individuals aged below 60 years are only eligible for a maximum benefit of ₹10,000. 

Exemption from Filing Income Tax Return for Senior Citizens

Senior citizens are exempted from filing income tax returns if they follow certain conditions. These criteria are listed below:

• Aged 75 years or more

• Annual income only includes pension and interest income

• Submission of declaration to their respective bank

• Their respective bank deducts TDS

• Loan received by the individual under the Reverse Mortgage Scheme 

Senior and super senior citizens enjoy extensive tax benefits on their annual income. Numerous deductions are available under old and new tax regimes, whether investment income or savings receipts. 

The most common deductions under the old tax regime include Sections 80C, 80CCC, 80CCD, 80D, 80DD, 80DDB, 80G, 80GGC, 80RRB, 80TTB, and 80U. These lower the senior and super-senior citizens' tax liability and give them a financial cushion during their old age. However, they should properly analyse the tax benefits and maximise their income.