What are the additional Income Tax Benefits for senior citizens and super senior citizens in India? Apart from Section 80C Deductions list, Section 80CCD under NPS and many other popular options, do senior citizens have more options to save income tax?
We will see 7 additional income tax benefits for senior citizens in India available with Old Tax Regime while calculating income tax.
Additional Income Tax Benefits for Senior citizens includes difference in tax slabs, Interest amount exemption under Section 80TTB, Standard Deduction for pensioners, high limit in medical insurance, Form 15H availability to avoid TDS in FD, high limit is section 80DDB and no advance tax to be paid by senior citizens.
Let us check all this in more details.
- Income Tax Benefits & Deductions for Senior Citizens Video
- Difference in Tax Slabs
- Section 80TTB limit of Rs. 50,000
- Standard Deduction available to pensioners
- Section 80D limit of Rs. 50,000
- Form 15H to avoid Fixed Deposit TDS
- Section 80DDB limit of Rs. 1 Lakh
- No advance tax to be paid for Business Income
- Conclusion
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- Income Tax Calculator App – FinCalC
Income Tax Benefits & Deductions for Senior Citizens Video
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In above video we have covered all options in detail. Let us check all of them below.
Difference in Tax Slabs
As mentioned in New Tax Regime article, the tax slab rates under New Tax Regime are same for all age groups.
But if you are a senior citizen and want to opt for Old Tax Regime, you get relief in Tax Slab Rates. You pay slightly less tax compared to non senior citizens in India.
Let us see the Old Tax Slab Rates:
Old Tax Regime for Senior Citizens (Age 60 to 79 Years)
| INCOME BRACKET | TAX RATE |
|---|---|
| Rs. 0 – Rs. 3,00,000 | 0% |
| Rs. 3,00,000 – Rs. 5,00,000 | 5% |
| Rs. 5,00,000 – Rs. 10,00,000 | 20% |
| More Than Rs. 10,00,000 | 30% |
As seen above, you don’t have to pay any tax on income up to Rs. 3 Lakhs in a financial year. For non senior citizens, this exemption limit is up to Rs. 2.5 Lakhs in a financial year.
Moreover, you can also make use of Tax Rebate u/s 87A to pay zero income tax on income up to Rs. 5 Lakhs in FY.
According to Tax Rebate under Section 87A, you get tax rebate of maximum Rs. 12,500 if your taxable income is below Rs. 5 Lakhs. So on income of Rs. 5 Lakhs, your income tax is Rs. 12,500, which gets cancelled with this tax rebate.
This Tax Rebate under Section 87A is applicable to both Old and New Tax Regime.
Let us now check Old Tax Regime for super senior citizens.
Old Tax Regime for Super Senior Citizens (Age above 80 Years)
| INCOME BRACKET | TAX RATE |
|---|---|
| Rs. 0 – Rs. 5,00,000 | 0% |
| Rs. 5,00,000 – Rs. 10,00,000 | 20% |
| More Than Rs. 10,00,000 | 30% |
For super senior citizens of India, the 5% tax bracket is not available and hence they don’t have to pay any tax on income up to Rs. 5 Lakhs in a financial year. This means the exemption limit for super senior citizens is Rs. 5 Lakhs while calculating income tax.
Now the important question is, how income tax is calculated for senior citizens in India?
You can read this article on Senior Citizens Income Tax Calculation with examples in excel.
Also, to make it more easy for you’ll, I have made an online Income Tax Calculator. Use below calculator to calculate your income tax based on your income, investments and Tax regime selection:
Section 80TTB limit of Rs. 50,000
If you get interest amounts in Savings account, fixed deposits, recurring deposits, you get a maximum limit of Rs. 50,000 as deduction to save income tax under Section 80TTB.
This is only available to Senior citizens. For non senior citizens, this limit is Rs. 10,000 (only in Savings Account) under Section 80TTA.
Read more on Fixed Deposits Interest Calculation and Recurring Deposit Interest Calculation.
Also, in your Savings account, interest is calculated on daily basis and compounded quarterly. Read Savings Account Interest Calculation.
Standard Deduction available to pensioners
In Budget 2022, Standard deduction was introduced to be available from FY 2020-21.
The current limit of Standard Deduction is Rs. 50,000 for Employees and Pensioners.
So in case you get monthly pension, you will get the benefit of Standard Deduction of Rs. 50,000 while calculating income tax. This means, you need to reduce this amount from your gross income to calculate your taxable income on which your income tax is calculated.
You can download Senior Citizen income tax calculator in excel from here.
Senior Citizen Income Tax Calculation FY 2024-25 Video
Section 80D limit of Rs. 50,000
Section 80D refers to medical insurance. So if you have medical insurance to cover for your expenditures in case of medical emergencies, the premium you pay for your medical insurance can be claimed as deduction under Section 80D.
The Section 80D limit for senior citizens is Rs. 50,000 in a financial year.
This means you can claim up to Rs. 50,000 of your medical insurance premium paid by you in FY to save on income tax, only under Old Tax Regime.
For new Tax regime, there are very limited deductions available which you can check in this new tax regime post.
Love Reading Books? Here are some of the Best Books you can Read: (WITH LINKS)
Form 15H to avoid Fixed Deposit TDS
Majority of the senior citizens don’t have a regular income source apart from monthly pension and interest from Fixed Deposits.
To give relief to senior citizens in such cases, Form 15H is provided to avoid TDS Deduction from your Fixed Deposits interest amount.
Ideally, if your interest amount in fixed deposits is above Rs. 10,000 in FY, you are liable for 10% TDS (Tax Deduction at Source) from your Fixed Deposits interest amount. To avoid this, you need to fill Form 15H every FY, declaring that either you don’t have any other source of income apart from FD interest, or your total income is within the basic exemption limit in FY.
This will help you avoid TDS deduction from your fixed deposits interest amount.
ALSO READ: Senior Citizen Saving Scheme Interest Calculation
Section 80DDB limit of Rs. 1 Lakh
Section 80DDB is for treatment of specific diseases mentioned in the income tax act, the limit of which is Rs. 1 Lakh in a financial year.
So in case any senior citizen undergoing treatment of specific disease, can claim deduction of Rs. 1 Lakh in FY while calculating income tax.
Some of the diseases included under Section 80DDB are:
- Ataxia
- Dementia
- Aphasia
- Dystonia Musculo rum Deformans
- Hemiballismus
- Parkinson’s Disease
- Chorea
- Motor Neuron Disease
No advance tax to be paid for Business Income
Another important relief you’ll get as a senior citizen is, you don’t have to pay advance tax in case you are running a business and generate business income.
Non senior citizen have to pay advance tax in case of business income, but senior citizens get the relief here, to only pay self assessment tax while filing ITR (Income Tax Return).
So you don’t have to worry about paying advance tax in case of business income, but make sure to pay self assessment tax!
Conclusion
So these were some of the additional relief and Income Tax Benefits for Senior Citizens in India.
It is important to note that these tax benefits for senior citizens are only available if you choose Old Tax Regime. New Tax Regime under Section 115BAC has reduced tax slabs, and you don’t get any deductions benefits in new tax regime.
So make sure that you take full benefit of mentioned deductions while calculation your income tax with Old Tax Regime.
Use this income tax calculator and plan your taxes accordingly.
Some more Reading:
- 6 more Tax Saving Options
- PPF Calculator in Excel
- Buy vs Rent a House with Excel calculations
- SIP Returns Calculation in Excel
- All Deductions in Section 80 & Chapter VI A
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Income Tax Calculator App – FinCalC
For Income Tax Calculation on your mobile device, you can Download my Android App “FinCalC” which I have developed for you to make your income tax calculation easy.
What you can do with this mobile App?
- Calculate Income Tax for new FY 2024-25 and previous FY 2023-24
- Enter estimated Investments to check income tax with Old and New Tax Regime
- Save income tax details and track regularly
- Know how much to invest more to save income tax
- More calculators including PPF, SIP returns, Savings account interest and lot more
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