Income Tax Slab For Senior Citizen & Super Senior Citizen FY 2023-24 (AY 2024-25)

As per Income-tax Act, 1961 senior citizen is an individual whose age is 60 years or more but less than 80 years. While a super senior citizen is an individual whose age is 80 years or more. This article briefly explains all the income tax provisions applicable to the resident senior citizen and super senior citizen.

Income Tax Act has categorized resident individuals into 3 parts-

1. Individuals whose age is up to 60 years
2. Senior citizens - Individuals whose age is 60 to 80 years
3. Super senior citizens - Individuals over 80 years of age

Income Tax Slab For Senior Citizen

Senior citizens over 60 years of age have an option to pay the 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 old tax regime, the income tax slab rates for senior citizen for FY 2023-24 (AY 2024-25)  are as follows-

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 (AY 2024-25) are as follows:

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:

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. However, they have to forgo many deductions and exemptions available to them.

The income tax slab rate as per new regime for FY 2023-24 is:

The health and education cess remains the same at 4%. The surcharge is applicable on the basis of total income as follows:

Note : 

The CBDT has clarified that a person born on 1st April would be considered to have attained a particular age on 31st March, the day preceding the anniversary of his birthday. In particular, the question of attainment of age of eligibility for being considered a senior/very senior citizen would be decided on the basis of above criteria. Therefore, a resident individual whose 60th birthday falls on 1st April, 2024, would be treated as having attained the age of 60 years in the FY 2023-24 and would be eligible for higher basic exemption limit of 3 lakh while computing his tax liability for AY 2024-25 under the old tax regime. Likewise, a resident individual whose 80th birthday falls on 1st April 2024 would be treated as having attained the age of 80 years in the FY 2023-24 and would be eligible for higher basic exemption limit of Rs. 5 lakh in computing his tax liability for AY 2024-25 under the old tax regime.

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 account 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 an interest, and many others 

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

Benefits Available To The Senior And Super Senior Citizen

Senior and super senior citizens are eligible to avail numerous tax benefits as offered by Income-tax Act, 1961 as are described below:

1. Higher income exemption limit

Senior citizens are required to pay tax over the income of Rs. 3,00,000 while this limit is Rs. 5,00,000 for super senior citizens under the old tax regime. This benefit is not available for the ordinary individuals as the limit is Rs. 2,50,000 for them.

2. Standard deduction

If they are earning salary or pension income, they can claim a deduction of Rs. 50,000 from such income.

3. Tax rebate under Section 87A

In the case of senior citizens, if taxable income is up to Rs. 5,00,000, then they can claim rebate from tax under the old tax regime, i.e. they are not required to pay any tax. Whereas under the new tax regime, the total income limit is upto Rs. 7 lakhs and rebate can be claimed upto Rs.25,000. 

4. Higher deduction for medical insurance premium

Senior citizens can claim a deduction up to Rs. 50,000 under the old tax regime for medical insurance premium under Section 80D instead of Rs. 25,000, which is available to other individuals on the condition that it is paid through online banking channels. The same deduction cannot be claimed under the new tax regime.

5. Higher deduction in respect of expenses incurred for treatment of specified diseases or ailment

They can claim a flat deduction of Rs. 1,00,000 in respect of medical expenses incurred for specified diseases of self or dependent senior citizen relatives as specified in the Act under Section 80DDB.

6. Higher deduction in respect of bank and post office interest

Senior citizens taxpayers can claim a total deduction up to Rs. 50,000 in respect of interest earned from savings bank accounts, bank deposits, post office deposits or cooperative banks under Section 80TTB. While people below 60 years of age can claim deduction only up to Rs 10,000 on interest earned in savings bank account.

7. Exemption from advance tax payment

Senior citizens are not required to pay advance tax if they do not earn any income from business or profession. Therefore, no interest is levied on late payment of advance tax. 

8. 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

9. Benefit of Reverse Mortgage Scheme

If a senior citizen transfers his house under reverse mortgage scheme where he receives monthly installments, he is not required to pay any capital gains tax on such transfer of house.

10. Deduction on investment in Senior Citizens Savings Scheme

Senior citizens over 60 years of age can invest in the Senior Citizens Savings Scheme and save tax by claiming a deduction up to Rs. 1,50,000 under Section 80C under the old tax regime. This scheme also ensures regular as well as higher interest payouts. The same deduction cannot be claimed under the new tax regime.

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

IIf 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.

You can use the Income Tax Calculator to calculate your taxes.

Conclusion

Filing an income tax return is an important way to declare your total income and contribute to the nation's development. It helps the government fund infrastructure and essential services such as healthcare and defense. Meeting all tax obligations before the due date is crucial to avoid penalties and legal consequences. Additionally, filing an income tax return holds significant legal value as it is an official record with the government.