Under the Indian Income Tax Act of 1961, there are specific income tax* slabs for senior citizens in India. The income tax calculation for senior citizens is dependent on these slabs and the level of income a person earns.

In this article, we will look at the guidelines for income tax for senior citizens and help you understand all the details.

The Income Tax Department stipulates two groups of senior citizens ages for income tax calculations in India -

• Senior citizens - who are 60 years of age or more during any time in the relevant tax year
• Super senior citizens - who are 80 years of age or more during any time in the relevant tax year
  
  
  

Let us first look at the tax slabs for senior citizens as well as super senior citizens.

Income Tax Slabs for Senior Citizens FY 2021-22 and AY 2022-23 (Old/Existing Regime)

Tax Slabs for Senior Citizens (Age 60-80 years)	Income Tax Rate
Up to ₹3,00,000	Nil
₹3,00,001 - ₹5,00,000	5% on over ₹3,00,000
₹5,00,001 - ₹10,00,000	₹10,000 (up to ₹5,00,000) + 20% on over ₹5,00,000
Above ₹10,00,000	₹1,10,000 (up to ₹10,00,000) + 30% above ₹10,00,000

Source: Salaried Individuals for AY 2022-23 | Income Tax Department
   

Income Tax Slabs for Senior Citizens FY 2021-22 and AY 2022-23 (New Regime under Section 115BAC)

In the Union Budget 2020-21, the Government of India declared a ‘New Tax Regime’ under Section 115BAC of the Income Tax Act, 1961. Anyone who wishes to file income tax returns without any deductions claimed can choose the new tax regime.

Tax Slabs for Senior Citizens (Age 60-80 years)	Income Tax Rate
Up to ₹2,50,000	Nil
₹2,50,001 - ₹5,00,000	5% on over ₹2,50,000
₹5,00,001 - ₹7,50,000	₹12,500 (up to ₹5,00,000) + 10% on over ₹5,00,000
₹7,50,001 - ₹10,00,000	₹37,500 (up to ₹7,50,000) + 15% on over ₹7,50,000
₹10,00,001 - ₹12,50,000	₹75,000 (up to ₹10,00,000) + 20% on over ₹10,00,000
₹12,50,001 - ₹15,00,000	₹1,25,000 (up to ₹12,50,000) + 25% on over ₹12,50,000
Above ₹15,00,000	₹1,87,000 (up to ₹15,00,000) + 30% on over ₹15,00,000

Source: Salaried Individuals for AY 2022-23 | Income Tax Department
   

Income Tax Slabs for Super Senior Citizens FY 2021-22 and AY 2022-23 (Old/Existing Regime)

Tax Slabs for Super Senior Citizens (Age 80+ years)	Income Tax Rate
Up to ₹5,00,000	Nil
₹5,00,001 - ₹10,00,000	20% on over ₹5,00,000
Above ₹10,00,000	₹1,00,000 (up to ₹10,00,000) + 30% on over ₹10,00,000

Source: Salaried Individuals for AY 2022-23 | Income Tax Department
   

Income Tax Slabs for Super Senior Citizens FY 2021-22 and AY 2022-23 (New Regime under Section 115BAC)

Tax Slabs for Super Senior Citizens (Age 80+ years)	Income Tax Rate
Up to ₹2,50,000	Nil
₹2,50,001 - ₹5,00,000	5% on over ₹2,50,000
₹5,00,001 - ₹7,50,000	₹12,500 (up to ₹5,00,000) + 10% on over ₹5,00,000
₹7,50,001 - ₹10,00,000	₹37,500 (up to ₹7,50,000) + 15% on over ₹7,50,000
₹10,00,001 - ₹12,50,000	₹75,000 (up to ₹10,00,000) + 20% on over ₹10,00,000
₹12,50,001 - ₹15,00,000	₹1,25,000 (up to ₹12,50,000) + 25% on over ₹12,50,000
Above ₹15,00,000	₹1,87,000 (up to ₹15,00,000) + 30% on over ₹15,00,000

Source: Salaried Individuals for AY 2022-23 | Income Tax Department
   

Income Tax Calculation for Senior Citizens

Note: Going forth in this article, senior citizens will include everyone above 60 years of age.

What is included as ‘income’ for senior citizen income tax calculation?

Income tax for senior citizens is applicable on income sources, such as:

• Regular income (salary, business income, etc., if the individual continues earning)
• Pension
• Earnings and interest income from applicable savings schemes
• Rental Income
• Post Office Schemes
• Reverse Mortgage
  
  

And any other income as per prevailing tax norms.

What is the list of income tax deductions for senior citizens?

• Standard deduction
• Deductions under Section 80C up to ₹1,50,000
• Deductions for health insurance premiums under Section 80D
• Deductions under Section 80DDB
  
  

And any other applicable deductions as per prevailing tax norms.

Gratuity and any other retirement benefits must be excluded from income tax calculations for senior citizens.

Senior citizens can use online income tax calculators to calculate the approximate tax payable/refundable. Input the following information to get the applicable income tax for senior citizens:

• Input the Assessment Year (If you are paying tax for the financial year 2021-22, the assessment year will be 2022-23.)
• Select the Residential Status (Indian, NRI, etc.)
• Select the Type of Taxpayer (Individual, HUF, etc.)
• Input the Income from Salary
• Add the Income for House Property if any
• Add the Capital Gains as well as Income from Other Sources if any
• Add any Gains or Profits from Business or Profession if applicable
• Provide any agricultural income if applicable
• Input the Standard Deduction (Most times this is added by default as applicable to the type of taxpayer)
• Check and add any Tax Deducted at Source (TDS) or Tax Collected at Source (TCS)
• If you have selected the old/existing tax regime, provide details of Deductions under the relevant sections. For instance, premiums paid for life insurance in India, ELSS contributions, Tax-Saving FDs, etc. come under Section 80C while health insurance premium is under Section 80D.
  
  

Once you enter the information, click on Calculate. The screen will display the:

• Applicable education cess and surcharge
• Total Tax Liability
• ITR submission due date
• ITR Assessment Completion date
  
  

Other Important Details Regarding Income Tax for Senior Citizens

• The income tax slab for senior citizens and super senior citizens includes a Standard Deduction of ₹50,000 for cases where income source is pension income, chargeable under the head salary.
• The income tax calculation for senior citizens for interest earned on fixed deposits includes an exemption of ₹50,000.
• Senior citizens can claim a tax deduction of up to ₹50,000 under Section 80D if they pay premiums for their health insurance plans.
• Under Section 80DDB, the medical deductions for senior citizens include higher deductions for a specified list of illnesses.
• Additionally, under Section 80DDB, senior citizens get a deduction of up to ₹1,00,000 for critical illness treatment.
• The income tax calculation for senior citizens also excludes income earned through the reverse mortgage.
  
  
  

Filing Income Tax for Senior Citizens

Senior citizens can use the following forms for tax-filing purposes:

ITR-1:

• Suitable for salary/pension income
• Includes income earned from house/property
• Includes income from other sources
• Excludes bringing forward previous years’ losses
• Excludes income from horse races and lottery wins
  
  

ITR-2:

• Suitable for income from Capital Gains from one or more property, income from other sources (excludes income from horse races and lottery wins), rental income
• Includes salary/pension income
• Includes income earned from house/property
• Excludes bringing forward previous years’ losses
  
  

ITR-4:

• Suitable for senior citizens earning more than ₹2 crores from a business
• Suitable for business income as applicable under Section 44AD and 44AE.
• Suitable for income from professions calculated under Section 44ADA.
• Includes salary/pension income up to ₹50 Lakh
• Includes income earned from house property
• Includes income from other sources (excludes income from horse races and lottery wins)
  
  

Tax¹-Saving for Senior Citizens with Life Insurance in India

If the tax liabilities are high, senior citizens can save their tax¹ outflow by buying a  life insurance in India and save tax¹ under Section 80C of the Income Tax Act.

For instance, Tata AIA Life Insurance offers a wide range of life cover policies that help with tax¹-saving. With  retirement solutions and savings solutions, you can save for retirement and avail of tax¹ deductions on the premiums paid. Additionally, if you wish to leave behind a sizeable financial legacy, you can opt for a term insurance plan and save tax¹ on the premiums paid.

Conclusion

Life insurance in India is an attractive avenue for saving on income tax¹. And, with Tata AIA Life Insurance, you get a reliable partner for your post-retirement insurance and savings needs. For more information, get in touch with us today!

L&C/Advt/2022/Jun/1196