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Income Tax for Senior and Super Senior Citizens for AY 2023-24
In India, the income tax slabs are structured in a progressive manner, where the tax rates increase as the income levels rise. Senior citizens aged 60 years and above but below 80 years and super senior citizens aged 80 years and above are provided with certain tax benefits and concessions. Let us talk about in detail the tax provisions applicable to the resident senior citizen and super senior citizen.
Who are senior citizens and super senior citizens?
For income tax purposes Individuals who are aged 60 years and above but below 80 years are called senior citizens.
Further, Individuals aged 80 years and above are called super senior citizens.
What are the sources of income for senior citizens and super senior citizens?
Senior citizens and super senior citizens usually earn incomes from the following sources –
- Pension
- Interest on savings accounts 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
Income Tax Slab Rate For Senior And Super Senior Citizen (Old Tax Regime)
The tax slabs for senior citizens and super senior citizens are different than the tax slabs for normal individuals as the tax exemption limits are higher for senior citizens and super senior citizens. Here are the applicable tax slabs rates for senior citizens for FY 2022-23:-
Income Tax Slab Rate for Senior Citizens (FY 2022-23) (Old Regime)
| Income level | Applicable |
|---|---|
| Up to INR 300,000 | Nil |
| INR 300,001 to INR 500,000 | 5% of the income exceeding INR 300,000 |
| INR 500,001 to INR 10,00,000 | 5% of the income exceeding INR 300,000 + 20% of the income exceeding INR 500,000 |
| INR 10,00,001 and above | 5% of the income exceeding INR 300,000 + 20% of the income exceeding INR 500,000 + 30% of the income exceeding INR 10,00,000 |
Income Tax Slab Rate for Super Senior Citizens (FY 2022-23) (Old Regime)
| Income level | Applicable tax |
|---|---|
| Up to INR 500,000 | Nil |
| INR 500,001 to INR 10,00,000 | 20% of the income exceeding INR 500,000 |
| INR 10,00,001 and above | 20% of the income exceeding INR 500,000 + 30% of the income exceeding INR 10,00,000 |
The above-calculated tax for senior and super senior citizens shall be increased by Health and Education Cess @ 4% of the income tax.
Additionally, the surcharge is applicable on the basis of total income as follows: up to 50 lakh the surcharge rate is nil
| Total income | Surcharge rate |
|---|---|
| > Rs. 50 Lakhs | 10% |
| > Rs. 1 crore | 15% |
| > Rs. 2 crore | 25% |
| > Rs. 5 crore | 37% |
*surcharge rates have been reduced to 25% under the new tax regime for taxpayers earning more than Rs 5 crore. Surcharge rate of 25% and 37% is not applicable in the case of STCG u\s 111A, LTCGu\s 112A, LTCG u\s 112, and Dividend income,
Income Tax Slab Rate For Senior And Super Senior Citizen (New Tax Regime)
Budget 2020 introduced an optional slab rate system for taxpayers, New Tax Regime. The new tax regime offers a concessional tax rate as compared to the old tax regime, however, they have to forego many deductions and exemptions.
- As per the announcement under Union Budget 2023, the new tax regime is suggested to be the default regime, effective from April 1, 2023. The income tax slabs under this regime are the same for all taxpayers, irrespective of their age. This means irrespective of the ages of senior and super senior citizens all have to pay the same taxes as those below the age of 60 under the new tax regime, which are:
| Income tax slabs | Rate of Taxation |
|---|---|
| Up to ₹3,00,000 | Nil |
| Between ₹3,00,001 and ₹6,00,000 | 5% of your total income that exceeds ₹3,00,000 |
| Between ₹6,00,001 and ₹9,00,000 | ₹15,000 + 10% of your total income that exceeds ₹6,00,000 |
| Between ₹9,00,001 and ₹12,00,000 | ₹45,000 + 15% of your total income that exceed ₹9,00,000 |
| Between ₹12,00,001 and ₹15,00,000 | ₹90,000 + 20% of your total income that exceeds ₹12,00,000 |
| More Than ₹15,00,000 | ₹1,50,000 + 30% of your total income that exceeds ₹15,00,000 |
The health and education cess along with surcharge remains the same.
Note:
If the senior or super senior citizens opt for the new tax regime specified under option 2, then they have to:
- Forego specified deductions and exemptions
- Forego benefits under section 80TTB
- Forego additional basic exemption limit available for senior or super senior citizens
- The benefit u/s 87A will still be available
What benefits are available to the senior and super senior citizens?
Following are a few of the benefits that are offered by the Income tax department to senior and super senior citizens:-
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 includes 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 is subject to the limit of 10% of Salary, in the case of government employees, 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 accounts 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 benefits in respect of expenses incurred for preventive health checkups amounting maximum up to Rs 5000 can be availed under the same section.
In case no medical policies have been taken for senior citizens, then to 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. If the disability suffered is 40% or more, but below 80%, a fixed deduction of INR 75,000 is allowed. For severe disabilities(80% or more), the deduction limit increases to INR 1,25,000 lakhs
Deduction under Section 80DDB
Expenses incurred for treating specific illnesses are covered under section 80DDB. If resident senior citizens, 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 the deduction would be the actual costs incurred up to a maximum of INR 1 lakh can be deducted from tax for the medical treatment of a dependent who is aged 60 or more or is a super senior citizen over the age of 80 years or more.
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 a deduction under Section 80GGC. Donation in cash is not allowed as a deduction. The deduction is allowed 100% of the donation
Deduction under Section 80RRB
If a resident senior citizen or super senior citizen has a registered patent and earns royalty income on such patents, the royalty received is allowed as a deduction from taxable income. The maximum amount of royalty 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 from FY 2018-19.
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 for normal disability, 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 a reverse mortgage scheme is not taxable. Under the scheme of a 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 realize the loan.
Moreover, resident senior citizens and super senior citizens are also not required to pay any advance tax on their incomes if they do not have 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.
Filing of income tax returns for senior citizens and super senior citizens
Income tax is required to be filed by senior citizens & super senior citizens if they have any income during the financial year. Even if the income is not taxable, the tax return should be filed for claiming a tax refund or for evidence of income earned during a financial year. To file an income tax return, senior citizens & super senior citizens would have to use the following income tax forms depending on the nature of their income – there is also the section in tds 194P which applicable to specified senior citizens whose age is 75 years or more and having only pension income and no other income except interest on from same specified bank in which pension income is received. Then in that case specified bank will deduct the TDS and the specified senior citizen is not required to file the return
| ITR Form | Nature of income |
|---|---|
| ITR 1 | Total income upto Rs 50 lakhs from salary, one house property, other sources or agriculture income upto Rs 5,000 |
| ITR 2 | Total Income more than 50 lakhs, or from two house property, capital gains or agriculture income exceeding Rs 5,000 |
| ITR 3 | Income from Business or Profession |
| ITR 4 | For presumptive income |
Frequently Asked Questions
Q- Are different deductions available for senior citizens and super senior citizens?
No, though the tax slabs are different, the same deductions are available to senior citizens and super senior citizens for the FY 2019-20. For FY 2022-23 if the senior citizens or super senior citizens opt for new tax regime then no deductions and exemptions will be available except 80CCD(2) and 80JJAA.
Q- Can senior citizens file their taxes online?
Yes, the online tax filing facility is also available for senior citizens.
Q- If the taxable income of senior citizens is below the exemption limit, is tax filing necessary?
Yes, tax filing is necessary if the senior citizen earns an income in a financial year, and if TDS has been deducted from any income of the senior citizen, through tax filing, the taxpayer can avail of a refund of such TDS.
Q- Which income is considered for the rebate, taxable or total income?
For the applicable rebate on tax, taxable income is considered. The deductions are deducted from the gross total income, and if the taxable income is below INR 5 lakhs, a full tax rebate would be allowed, and the senior citizen would have to pay no tax on his income
Q- Is 80c applicable for senior citizens?
Yes. Deduction u/s 80C is applicable to senior citizens as per the existing tax slabs, but the same will not be available under the new tax regime, which has been left at the option of the taxpayer.
Q- What are the schemes for saving income tax for senior citizens ?
The following options are available to senior citizens for saving income tax.
- Investment in senior citizen saving scheme u/s 80C upto Rs. 1,50,000/-
- Deduction u/s 80TTB for interest income on deposits u/s 80TTB upto Rs.50,000/-
- Deduction u/s 80D of Rs 50000
- Deduction u/s 80DDB of Rs 100000
- The benefit of above schemes cannot be claimed by the taxpayer under the optional tax slabs announced via Budget 2020 under the new tax regime.
Q- Does a super senior citizen of 83 years have to file an income tax return if his income is less than 5 lakh without deducting any rebate?
No, Assesse does not require to file an income tax return because his income is less than the basic exemption limit for the FY 2022-23. No payments in this case would be required for the assessee if he opts for the old scheme, in case a new tax regime is chosen then the benefit of increased basic exemption limit in case of super senior citizens will not be available, but Rebate u/s 87A can still be claimed.
Q- Is a businessman above 60 years of age not counted as a senior citizen in the income tax system? Is it just for people with jobs?
No. He is eligible to count as a senior citizen.
Q- My father is a senior citizen and my mother is not, what is the maximum amount I can claim for their insurance under parental medical insurance tax exemption?
The maximum deduction assessee can claim is Rs 50000 u/s 80D. The benefit will be available for the FY 2019-20 and will continue for FY 2022-23 if the assessee opts for old taxation slabs. In case a new tax regime as proposed u/s115BAC is chosen then no such benefit of deduction for premium paid on a medical insurance policy can be claimed.
Q- If my parents are dependent on me, can I claim a tax exemption on the expenses incurred for medical treatment?
If parents are senior or super senior citizens then deduction of medical expenditure on parents can be claimed as deduction u/s 80D upto Rs. 50,000/-
Q- What would be the salary of a senior citizen after deductions like PPF and NPS if he is paying 5 lakhs as tax?
Net taxable salary will be Rs 2235900 on which tax payable will be Rs. 5lakh
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