As per the Income Tax Act, 1961, the income tax is calculated based on the individual’s annual income. A senior citizen in India can have income from multiple sources, such as pensions, rental income, fixed deposit returns, income from reverse mortgages, and so on. In the case of senior and super senior citizens, the tax slabs are slightly different in order to offer some financial relief and ensure a secure and comfortable life for them. In this article, we will discuss the income tax slab for senior citizens – the various provisions and exemptions available to them.
To begin with, a senior citizen in India, as per the Income Tax Act, 1961, is a person who is 60 years of age or older, while a super citizen is a person above 80 years of age.
Income Tax Slab for Senior Citizens
The Income Tax Act has categorised Indian residents into 3 categories based on their age:
- Individuals below 60 years
- Senior citizens, whose age is above 60 years but below 80 years
- Super senior citizens who are above 80 years of age
Senior Citizen Tax Slab for the Old Tax Regime
|Income slab||Income tax rate|
|Up to ₹3,00,000 lakh||Nil|
|₹3,00,001-500,000||5% on income over ₹3,00,000|
|₹5,00,001-10,00,000||₹10,000 + 20% of income over ₹5,00,000|
|> 10,00,000||₹1,10,000 + 30% of income over ₹10,00,000|
Income Tax Slab for Super Senior Citizen Under Old Tax Regime
Super senior citizens above 80 years can also avail of income tax slabs as per the old and new tax regimes. As per the old tax regime, super senior citizen tax slabs are as follows:
|Income slab||Income tax rate|
|Up to ₹5,00,000||Nil|
|₹5,00,001-10,00,000||20% on income above ₹5,00,00|
|> ₹10,00,000||₹1,00,000+30% on income over ₹10,00,000|
To the above tax slabs, a 4% Health and Education Cess is added along with a surcharge, as shown in the following table.
Income Tax Surcharge Rate
|Total income||Surcharge rate|
|> ₹50 lakh||10%|
|> ₹1 crore||15%|
|> ₹5 crore||37%|
Income Tax Calculation for Senior Citizens AY 2023-24
Now let’s check out the income tax slab for senior citizens for FY 2023-24 under the new tax regime. It is calculated based on the amendments introduced in the Financial Act, 2020. The new system has let go of many deductions that were available under the old tax regime. The tax slabs for senior and super senior citizens are re-categorised as below.
|Income slab||Income tax rate|
|Up to ₹ 2,50,000||NIL|
|₹10,00,001 to 12,50,000||20%|
|₹12,50,001 to 15,00,000||25%|
The cess and the following rates of surcharges apply:
- A 10% surcharge is applicable on the income tax for income between ₹50 lakh and ₹1 crore.
- For income above ₹1 crore, a surcharge 15% applies to the income tax.
Income Tax Filing for Senior Citizens
To calculate the total income tax liabilities of senior or super senior citizens, their income from all sources are added together to measure their gross total income. Thereafter, the deductions under the chosen tax regimes are applied to calculate the taxable income portion.
Senior and super senior citizens must file ITR under the following circumstances.
ITR – 1 for individuals who earn income from the following heads
- Salary or pension
- Income from houses or property, excluding losses adjusted from the previous financial year
- Income from other sources, excluding sources like income from horse racing or lottery
ITR – II for individuals who earn income from the following heads
- Earnings from salary or pension
- Income from house or property
- Other sources of income, excluding winning amounts from horse racing or lottery
- In case the income from another individual (spouse or other member) needs to be combined
Income Tax Benefits for Senior and Super Senior Citizen
There are multiple benefits offered to senior and super senior citizens under the old tax regime. These are discussed below:
Higher income exemption limit:
- Senior citizens enjoy a tax exemption limit of ₹ 3 lakh, whereas super senior citizens are given an exemption limit of ₹ 5 lakh. The general exemption limit is ₹2.5 lakh.
- These taxpayers can receive a tax deduction of ₹ 50,000 on pension income.
Deduction on interest earnings:
- Senior citizens are not required to pay tax on interest income up to ₹ 50,000 a year under Section 80TTA.
- An additional discount of ₹ 50,000 is available on interest earnings from Post Office or Fixed Deposits schemes.
Exemption on advance tax payment:
- Under Section 207, senior taxpayers are exempt from advance tax payments.
Reverse mortgage tax benefit:
- Senior citizens are not required to pay taxes on income received from a reverse mortgage loan. Senior citizens who don’t have any income from business or profession are not required to file an advance tax.
Higher deduction on medical expenses:
- A flat deduction of ₹ 100,000 applies to medical expenses incurred for specified diseases of oneself or a dependent senior citizen relative under Section 80DDB of the IT Act.
Higher deduction on medical insurance premiums:
- Senior citizens receive a standard deduction of ₹ 50,000, instead of ₹ 25,000 available to other taxpayers, on premiums paid on medical insurance.
Tax rebate under Section 87A:
- Senior citizens (not applied to super senior citizens) can avail of a tax rebate of ₹ 50,000. The taxable amount will be calculated after deducting ₹ 50,000.
The income tax calculation is slightly different for senior and super senior citizens. To determine applicable tax rates, it is best to use a senior citizen income tax calculator to eliminate any doubt. Filing an ITR is crucial to avoid penalties and legal consequences.
Is ITR filing compulsory for senior citizens?
Yes, ITR filing is mandatory if the taxpayer earns taxable income. However, individuals over 75 years of age, whose source of income is pension and interest income from the same bank can avoid filing tax.
What are the deductions available to senior citizens in AY 23-24?
Senior citizens are given tax rebates under the following heads:
- Interest earned on savings accounts and fixed deposits is exempt for senior citizens
- Under Section 80TTB, a tax deduction is allowed for interest income up to ₹50,000 from deposits with banks, post offices,or co-operative banks
- No TDS deduction on interest payments of up to ₹50,000 on bank, post office or co-operative bank
What is the income tax limit for senior and super senior citizens?
Income up to ₹3,00,000 is tax-free for senior and super senior citizens. Beyond the limit, their income is taxed as per the income tax slab for senior citizens.
Can senior citizens claim an income tax deduction on pension income?
Yes, senior citizen taxpayers can claim a standard deduction of ₹50,000 on their pension income.