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Income Tax for Senior Citizens: A Detailed Guide

20-06-2022 |

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

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Tata AIA Life Insurance

A joint venture between Tata Sons Pvt. Ltd. and AIA Group Ltd. (AIA),  Tata AIA Life Insurance  is one of the leading life insurance providers in India. We post everything you need to know about life insurance, tax savings and a variety of lateral topics such as savings and investments in this space. You can access and read a host of different blogs, articles and pages at the Tata AIA Life Insurance Knowledge Center or get in touch with us with any queries or questions!

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Disclaimer
  • Insurance cover is available under the product.
  • The products are underwritten by Tata AIA Life Insurance Company Ltd.
  • The plans are not a guaranteed issuance plan, and they will be subject to Company’s underwriting and acceptance.
  • For more details on risk factors, terms and conditions please read the sales brochure carefully before concluding a sale.
  • This blog is for information and illustrative purposes only and does not purport to any financial or investment services and does not offer or form part of any offer or recommendation. The information is not and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.
  • Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document issued by the insurance company.
  • Every effort is made to ensure that all information contained in this blog is accurate at the date of publication, however, the Tata AIA Life shall not have any liability for any damages of any kind (including but not limited to errors and omissions) whatsoever relating to this material.
  • *Income Tax benefits would be available as per the prevailing income tax laws, subject to fulfilment of conditions stipulated therein. Income Tax laws are subject to change from time to time. Tata AIA Life Insurance Company Ltd. does not assume responsibility for tax implications mentioned anywhere in this document. Please consult your own tax consultant to know the tax benefits available to you.