The Income Tax Act, 1961, levies a tax on every individual who earns an annual income over the tax-exempt limit, at a prescribed rate. In this regard, a senior citizen’s earnings can exist in the form of pension, interest on savings, fixed deposits, rental income, reverse mortgage, etc. According to the ITA, these sources of earning are taxable under income tax for senior citizens.
Senior Citizen Age for Income Tax
According to the law, a senior citizen is any person who is 60 to 80 years of age and is a citizen of India. A resident individual aged between 60-80 years with an annual income of over Rs. 3,00,000 is liable to pay the prescribed tax amount.
A super senior citizen is an individual who is over 80 years of age. The Income Tax Act levies a tax on the income of a super senior citizen if his/her annual income exceeds Rs. 5,00,000.
Income Tax Slab For Senior Citizen
Senior citizens over 60 years of age have an option to pay tax as per the old or the new tax regime. The new tax regime is introduced by the central government via Finance Act, 2020, whereby concessional tax rates are introduced which is explained in the later part of the article. However, non resident senior citizens are not eligible for the below mentioned tax slabs as the normal provisions of income tax are applicable to them.
If an Individual is paying tax under the new tax regime, concessional tax rates are prescribed under section 115BAC with conditions to claim exemptions, deductions and losses. However, under the old tax regime, senior citizen individuals can enjoy unconditional claim of exemptions and deductions.
As per the old tax regime, the income tax slab rates for senior citizens for FY 2023-24 and FY 2024-25 (AY 2024-25 and AY 2025-26) 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 Rs. 3,00,000 |
5,00,001 to 10,00,000 | Rs. 10,000 + 20% of income over Rs. 5,00,000 |
Above 10,00,000 | Rs. 1,10,000 + 30% of income over Rs. 10,00,000 |
Income Tax Slab For Super Senior Citizen
Super senior citizens over 80 years of age can also avail the benefit of old and new tax regime as they have the choice to opt between the two, whichever is more beneficial.
As per the old tax regime, the income tax slab rates for super senior citizen for FY 2023-24 and FY 2024-25 (AY 2024-25 and AY 2025-26) 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 Rs. 5,00,000 |
Above 10,00,000 | Rs. 1,00,000 + 30% of income over Rs. 10,00,000 |
The above calculated tax for senior and super senior citizens shall be increased by Health and Education Cess @ 4% of the income tax.
Additionally, surcharge is applicable on the basis of total income as follows:
Total income | Surcharge rate |
> Rs. 50 Lakhs | 10% |
> Rs. 1 crore | 15% |
> Rs. 2 crore | 25% |
> Rs. 5 crore | 37% |
Sources of Income for Senior and Super Senior Citizens
Senior and super senior citizens usually earn income from the following sources :
- Pension
- Interest on savings accounts or fixed deposit schemes
- Rental Income from renting out a house property
- Income from Capital Gains
- Senior citizen saving schemes
- Reverse mortgage schemes
- Post office deposit schemes which also pay interest, and many others
FAQs
Income Tax Slab Rate As Per New Tax Regime For Senior And Super Senior Citizen ?
Finance Act, 2020 introduced a new tax regime for individual taxpayers, according to which concessional tax is to be paid by them. This regime does not differentiate between senior and super senior citizens in terms of tax slabs. However, they have to forgo many deductions and exemptions available to them.
The income tax slab rate as per the new regime for FY 2023-24 (AY 2024-25) is:
Income slab (in Rs.) | Income tax rate |
Up to Rs. 3,00,000 | Nil |
Rs 3,00,001 to Rs 6,00,000 | 5% |
Rs 6,00,001 to Rs 9,00,000 | 10% |
Rs 9,00,001 to Rs 12,00,000 | 15% |
Rs 12,00,001 to 15,00,000 | 20% |
Above Rs 15,00,000 | 30% |
Benefits to be Forgone by the Senior and Super Senior Citizen in Case they Avail the Benefit Of New Tax Regime?
- Benefit of higher income exemption limit of Rs. 3,00,000 and Rs. 5,00,000
- Leave Travel Allowance
- House Rent Allowance (HRA)
- Conveyance Allowance
- Children Education Allowance
- Daily expenses in the course of employment
- Relocation allowance
- Helper allowance
- Other special allowances
- Professional tax and Entertainment allowance
- Interest on housing loan (Section 24) on self-occupied property
- Deduction under Chapter VI-A such as 80C, 80D, 80E, 80TTB, etc. However, they can avail deduction under Section 80CCD(2) i.e. employer contribution to NPS, 80CCH contribution to Agniveer fund and 80JJAA i.e. deduction for employment of new employees