Important aspects of Income Tax law that senior citizens and super senior citizens should know for AY 2025-26
A few months ago, the Income Tax Department released a useful brochure detailing the relevant tax provisions which senior citizens (over 60 years) and super senior citizens (over 80 years) should know about.
What are the latest income tax slabs for senior citizens and super senior citizens for AY 2025-26 and AY 2026-27?
Chartered Accountant Suresh Surana says that for assessment Years (AY) 2025–26 and 2026–27, taxpayers, including senior citizens, can choose between the old tax regime and the new tax regime.
While the old regime offers higher basic exemption limits and allows for various deductions and exemptions, the new regime offers concessional tax rates but there is a restriction on exemptions and deductions. The income tax slabs differ on the basis of the age of the individual under the old regime, specifically for senior citizens (aged 60 years or more but less than 80 years) and super senior citizens (aged 80 years or above). In contrast, under the new regime, the same slab rates apply uniformly to all individuals, regardless of age.
The tax rates for seniors citizen taxpayers under the new tax regime for FY 2024-25 and FY 2025-26 are as follows:
| Tax Slabs (FY 2024-25) | Tax Rates | Tax Slabs (FY 2025-26) | Tax Rates |
| Upto Rs 3,00,000 | Nil | Upto Rs 4,00,000 | Nil |
| Rs 3,00,001 to Rs 7,00,000 | 5% | Rs 4,00,001 to Rs 8,00,000 | 5% |
| Rs 7,00,001 to Rs 10,00,000 | 10% | Rs 8,00,001 to Rs 12,00,000 | 10% |
| Rs 10,00,001 to Rs 12,00,000 | 15% | Rs 12,00,000 to Rs 16,00,000 | 15% |
| Rs 12,00,001 to Rs 15,00,000 | 20% | Rs 16,00,000 to Rs 20,00,000 | 20% |
| Above Rs 15,00,000 | 30% | Rs 20,00,001 to 24,00,000 | 25% |
| Above Rs 15,00,000 | 30% |
andFY2025-26(AY2026-27)areasfollows.jpg)
The tax rates under the old tax regime for senior citizens for FY 2024-25 (AY 2025-26) and FY 2025-26 (AY 2026-27) are as follows
Check out the details below to find out what the income tax department said in the brochure.
Who is a senior citizen and a super senior citizen?
At any time during the relevant financial year:
- Individual resident who is of the age of 60 years or above but less than 80 years is a Senior Citizen.
- Individual resident who is of the age of 80 years or above is a Super Senior Citizen.
Note: Senior Citizen as well as Super Senior Citizen enjoys all the tax benefits available to non-senior citizens along with some special benefits.
Form No. 15H for non-deduction of tax at source
A Senior/Super Senior citizen may submit declaration in Form No. 15H to the deductor for non-deduction of TDS to the effect that tax on his estimated income for the relevant year in NIL. Based on such verified declaration, the Deductor will not make any TDS.
Sanjoli Maheshwari, Executive Director, Nangia & Co LLP, says that as per the prescribed provision and rules thereof, a resident individual aged 60 years or above (i.e., a senior citizen) can furnish a self-declaration in Form 15H to the person responsible for paying certain income (including interest on fixed deposits), that the tax on his estimated total income (inclusive of such income) will be ‘NIL’ in order to ensure that no tax is deducted at source by the said person on such income.
Maheshwari says that while computing the tax on estimated total income, benefit of rebate under Section 87A (available to resident individuals with taxable income Rs 12 lakh under the new regime from AY 2026-27 onwards) will be considered.
She says: “Accordingly, if a senior citizen’s total income is Rs 12 lakh under the new tax regime in AY 2026-27, and the tax liability computed after considering the eligible rebate under Section 87A is ‘Nil’, he can submit Form 15H so that no tax is deducted at source on interest on fixed deposits.”
Higher basic exemption for senior and super senior citizens
For Senior Citizens in AY 2024-25, the basic exemption limit is fixed at a figure of Rs 3 lakh in both New tax regime (default), as well as, at Rs 3 lakh in Old tax regime. For Super Senior Citizens in AY 2024-25, the basic exemption limit is fixed at Rs 3 lakh in New tax regime (default), while, at Rs 5 lakh in Old tax regime.
Normal provisions of the Income Tax Act are applicable for non resident senior citizens. To avail Old tax regime, both Senior citizen/ Super senior citizen have to exercise option u/s 115 BAC(6). Otherwise, the New tax regime will be the default. Note: For other individual taxpayers, the basic exemption limit upto which she/he is not required to pay any tax is Rs 3 lakh (for AY 2024-25 and 2025-26 in the New tax regime) and Rs 2.5 lakh (For A.Y. 2024-25 in Old tax regime).
Exemption from payment of advance tax
A resident senior/super senior citizen, resident of India, need not pay any advance tax, provided he does not have any income under the head “Profits and Gains of Business or Profession.
Note: Every person whose estimated tax liability for the year is Rs. 10,000/-or more, is liable to pay advance tax.
Benefits of standard deduction
Senior and super senior citizens who have receipt of pension income from their former employers can claim the following deduction:
- Up to Rs 75,000 against such income under the New tax regime (AY 2025-26 onwards), increased from existing Rs 50,000/-(AY 2024-25).
- up to Rs 50,000 against such income under the old tax regime.
If pension is less than Rs 75,000 (new tax regime) or Rs 50,000 (old tax regime), the deduction will be limited to the amount of pension received.
Higher Deduction for Medical insurance premium/ medical expenditure-section 80D
- This is available only under the Old tax regime.
- From AY 2020-21 onwards, the maximum limit for deduction under Section 80D in respect of payment made for health insurance premium in respect of a Senior/Super Senior citizen has been allowed at Rs 50,000.
- And a deduction is allowed up to Rs 50,000 for medical expenses incurred on the health of a senior/super senior citizen provided no amount is paid for health insurance of such person.
- Both deductions can also be claimed by taxpayer who is a senior citizen and also has senior/super senior citizen parents. For e.g. If the taxpayer pays medical premium for self and incurs medical expenses for parents, or vice versa.
It must be noted that:
- For claiming this deduction, it is mandatory that the health insurance premium/ medical expenses are paid by any mode other than cash.
- For other individuals, the maximum limit of deduction under Section 80D is Rs 25,000.
Deduction in respect of maintenance and medical treatment of a dependent with disability-Section 80DD
- A deduction from Rs 75,000 to Rs 1,25,000, depending upon severity of disability, is allowed u/s 80DD of Old tax scheme to a resident Individual or HUF for medical expenditure incurred directly on a dependent with disability, or, through a deposit in a notified scheme meant for maintenance and medical treatment of such dependent with disability for their lifetime.
Higher Deduction in respect of expenses incurred for Medical Treatment of a specified disease or ailment-Section 80DDB
Under the Old tax regime, a Senior/Super Senior taxpayer can avail deduction upto Rs 100000 in respect of selfmedical treatment for specified disease or ailments.
Under the Old tax regime, an Individual or HUF taxpayer can avail deduction upto Rs. 100000 in respect of treatment of Senior/Super Senior citizen for specified disease or ailments, provided such Senior/Super Senior citizen is dependent on Individual or a member of HUF.
Note: For non-senior Individual taxpayers and HUF, the amount of deduction available in respect of expenses incurred for medical treatment of self or non-senior citizen dependent/member for specified disease or ailments u/s 80DDB is Rs 40,000 under the Old tax regime.
Higher Deduction for Interest Income from Bank and Post Office
A Senior/Super Senior citizen can claim deduction upto Rs. 50,000 u/s 80TTB, under Old tax regime, in respect of interest income earned on savings bank accounts, bank deposits or any deposit with post office or cooperative banks.
In case such interest income earned by him during the year is less than Rs 50,000, the payer bank/ post office will not deduct any tax from such interest income.
Note: Individual taxpayers other than senior citizens are allowed maximum deduction of Rs 10,000 u/s 80TTA in respect of interest income from saving bank accounts. Please note that if the deposit is held for/by/on behalf of any firm/AOP/BOI, the member/partner cannot avail this benefit, even if senior citizen.
Eligibility to file Manual Income Tax Return
A super senior citizen aged 80 years or above filing his Return of Income in Form SAHAJ (ITR-1) or SUGAM (ITR-4) and having total income of more than Rs. 5 lakh or having a refund claim, can file his/her Return of Income in paper mode. For such individuals, electronic filing of ITR – 1 or ITR-4 (as the case may be) is not mandatory.
Note: The Super Senior Citizen may opt for e-filing, if he chooses to do so.
Income tax exemption on Transfer of Capital asset under ‘Reverse Mortgage Scheme’
The transfer of a residential house property by way of reverse mortgage as per the Reverse Mortgage Scheme made and notified by the Central Government for Senior/Super Senior citizen, is not liable to be taxed as Capital Gain (even the loan amount received is not taxable under any other head of income).
Exemption from filing ITR
The following category of Senior Citizens are not required to file their ITR:-
- Resident Senior Citizens-75 years or more, and
- Having only pension income and interest income only from the account(s) maintained with a bank in which they receive such pension.
Note:
- Applicable from A. Y. 2021-22,
- The specified bank shall be responsible for computing their total income and deducting tax thereon after giving effect to various deductions allowable under Chapter VI-A and rebate under Section 87A of the Income Tax Act, 1961.
Details of ITRs to be filed by Senior Citizens: ITR-1(Sahaj)-For Senior citizens whose income includes salary/pension, interest from savings accounts/fixed deposits, and rental income from a single residential property. Total income reported must not exceed Rs 50 Lakhs.
- ITR-2- For Senior citizens whose income also includes capital gains from sale of shares, property, or other assets,
- ITR-3 or ITR4(Sugam)- For Senior citizens whose income includes earnings from any business or profession.
aniltikotekar4sme.com 