Income Tax Benefits Available for Senior Citizens in 2024
By tax filing
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 Slab for Senior Citizens
The tax slabs for senior citizens for FY 2023–24 are as follows:
- Up to Rs. 3,00,000 – No Tax
- From 3,00,001 to 5,00,000 – 5%
- From 5,00,001 to 10,00,000 – 20%
- Above 10,00,000 – 30%
Benefits for Income Tax Slab for Senior Citizens above 60 years
Some of the benefits that can be availed by senior citizens under the Income Tax Act are mentioned below:
- Deductions under Section 80C of the Income Tax Act.
- Benefits under the Reverse Mortgage Scheme.
- Exemptions are provided in the case of advance tax payment.
- Higher interest rates are offered by banks.
- Deductions are higher in the case of certain medical treatments.
- Higher deductions are provided on medical insurance.
- Tax deductions under Section 87A.
- Standard deductions.
- Income exemption limit is higher.
Read more at: ITR for Senior Citizens: Exemption from filing Income Tax Returns for senior citizens above 75
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 Slabs | Tax Rate |
| Up to Rs.2,50,000 | None |
| Rs.2,50,001 to Rs.5,00,000 | 5% |
| Rs.5,00,001 to Rs.7,50,000 | 10% |
| Rs.7,50,001 to Rs.10,00,000 | 15% |
| Rs.10,00,001 to Rs.12,50,000 | 20% |
| Rs.12,50,001 to Rs.15,00,000 | 25% |
| Above Rs.15,00,000 | 30% |
- Income tax exemption limit is up to Rs.2.5 lakh.
- Surcharge is applicable if total income is more than Rs.50 lakh and up to Rs.1 crore: 10% of income tax.
- Surcharge is applicable if total income exceeds Rs.1 crore: 15% of income tax.
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. |
| Section 80DDB | Up to Rs.1 lakh can be claimed. |
| Section 80G | Based on the charity, the amount that can claimed will vary. |
| Section 80GGC | Any contributions made towards an electoral trust or political party. |
| Section 80RRB | Up to Rs.3 lakh can be claimed. |
| Section 80TTB | Up to Rs.50,000 can be claimed. |
| Section 80U | Depending on the severity of the disability, up to Rs.1.25 lakh can be claimed. |
Income Tax Benefits for Senior and Super Senior Citizen
- Interest Income
- 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.
- Advance Tax
- 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:
ITR I – Individual whose total Income Includes:
- Salary or pension
- Income from house or property (excluding incidents where loss is brought forward from previous financial years)
- Income from the other sources (excluding income from horse racing or winning lottery)
ITR 2 – Individual whose total Income Includes:
- Salary or pension
- Income from house or property
- Capital gains
- 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.
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