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Income tax is a direct tax that follows a progressive slab rate, meaning the tax rate increases as the taxpayer's income rises. The Income-tax Act 1961 provides two tax regimes, i.e., the old regime and the new regime. The old tax regime also provides tax benefits in the form of reduced tax rates and a higher basic exemption limit to senior citizens (above 60 years of age) and super senior citizens (above 80 years of age). This guide explores the slab rates applicable for senior and super senior citizens under both regimes for FY 2024-25 (AY 2025-26).
The Indian government specifies certain slabs under which it levies income tax on taxpayers based on slabs. People with different incomes belong to different tax slabs and pay different tax rates. It is a progressive system of taxation where the tax liability keeps increasing with an increase in the taxpayer's income. These income slabs keep changing as per the budget from year to year. Budget 2024 also proposed some changes in the Income Tax slabs. The Budget also ensures that the tax liability for super senior citizens and senior citizens is different. This article lists the latest slab rates (AY 2025-26) in the new tax regime for senior citizens.
The basic exemption limit under the new tax regime was increased from 2.5 lakhs to 3 lakhs. A standard deduction of 50,000 was increased to 75,000 from the financial year 2024-25 under the new tax regime, and the rebate under section 87A increased for taxable income equal to or less than 7 lakhs. The highest surcharge rate under the new tax regime was reduced from 37% to 25%.
Taxpayers above 60 years and below 80 years of age are considered senior citizens, and those above 80 years of age are considered super senior citizens as per the Income Tax Act of 1961. The old tax regime had different tax rates for different categories of individuals. This helped reduce the tax burden on people who don't have a regular income. Below are the tax rates stated in the old tax regime for senior citizens.
The Income Tax slabs proposed in the old tax regime for super senior citizens are mentioned below.
| Income Range | Tax Rate | Health and Education Cess |
|---|---|---|
| Up to INR 3,00,000 | Nil | Nil |
| More than 3,00,000 but less than 5,00,000 | 5% of annual income | 4% |
| More than 5,00,000 but less than 10,00,000 | 20% of annual income | 4% |
| More than 10,00,000 | 30% of annual income | 4% |
| Income Range | Tax Rate | Health and Education Cess |
|---|---|---|
| Up to 5,00,000 | Nil | Nil |
| More than 5,00,000 but less than 10,00,000 | 20% of the annual income | 4% |
| More than 10,00,000 | 30% of the annual income | 4% |
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As per the new tax regime, there is no differentiation in tax rates among different categories of individuals. In other words, senior and super-senior citizens will have to pay taxes at the same rates as individuals below the age of 60. The slab rates as per the new tax regime for senior citizens and senior super citizens are as follows -
| Income Tax Slabs | Rate of Taxation |
|---|---|
| Up to 3,00,000 | Nil |
| 3,00,000 to 6,00,000 | 5% of total income exceeding Rs. 3 lakhs |
| 6,00,000 to 9,00,000 | 10% of total income exceeding 6,00,000 + 5%(3,00,000) |
| 9,00,000 to 12,00,000 | 15% of total income exceeding 9,00,000 + 10% of 3,00,000 + 5% of 3,00,000 |
| 12,00,000 to 15,00,000 | 20% of total income exceeding 12,00,000 + 15% of 3,00,000 + 10% of 3,00,000 + 5% of 3,00,000 |
| More than 15,00,000 | 30% of total income exceeding 15,00,000 + 20% of 3,00,000 + 15% of 3,00,000 + 10% of 3,00,000 + 5% of 3,00,000 |
The tax calculation under the new regime is pretty similar to that of the old regime. Let us understand the calculation with an example -
Suppose your income is 8.5 lakhs. Then, your income tax will be calculated as follows -
| Income range | Tax |
|---|---|
| Up to 3,00,000 | Nil |
| 3,00,000 - 6,00,000 | 5% of 3,00,000 = 15,000 |
| 6,00,000 - 9,00,000 | 8,50,000 - 6,00,000 = 10% of 2,50,000 = 25,000 |
| Tax payable | 40,000 |
| Add: Education Cess | 4% of 40,000 = 1600 |
| Total Tax Payable | 41600 |
The new tax regime has proposed a reduction in the surcharge for senior citizens having a taxable income exceeding Rs.5 crore. The surcharge on income exceeding Rs.5 crore has been reduced from 37% to 25%. Here are the surcharge rates as per the new tax regime -
| Taxable Income | Surcharge |
|---|---|
| 50 lakhs to 1 crore | 10% |
| 1 crore to 2 crore | 15% |
| Above 2 crore | 25% |
If the senior citizens and super senior citizens decide to opt for the new tax regime, they will have to forego most of the benefits available under the Old tax regime. Some of them are listed as follows:
Senior citizens must file their Income Tax Return (ITR) to claim tax refunds. They can use the following ITR forms based on their income sources:
ITR-1 (Sahaj)
Applicable to individuals whose total income includes:
ITR-2
Applicable to individuals whose total income includes:
Whether you opt for the old tax regime or the default new one depends on your income. However, calculating taxes and filing ITR alone can be intimidating. Don't worry! We at tax2win help you file your returns easily with the help of an eCA. So visit Tax2win and get CA-assisted services now!
The new tax regime has increased the income limit for availing of rebates under section 87A. The super senior citizens and senior citizens can now avail of a deduction of INR 25,000 for an income of up to 7 lakhs. However, if the income exceeds 7 lakhs, the assessee will not get any rebate, and the total amount will be taxable as per the applicable slab rate.
Pensioners and family pensioners can avail of a standard deduction of up to Rs.75000
No deduction under sections 80C and 80D are not available under the New tax regime.
Even if the interest income exceeds Rs.2.5 lakhs, you can still use Form 15H. This is so because the maximum income exemption for senior citizens is Rs.3,00,000 and the interest income is below this threshold. Similarly, for super senior citizens, this limit is Rs.5,00,000.
An individual whose pension income exceeds Rs.2.5 lakhs has to file an ITR. Similarly, for senior citizens, this threshold is Rs.2.5 lakhs, and for super senior citizens, this threshold is Rs.5 lakhs.
The exemption limit for senior citizens is determined based on their total income rather than their age. This includes income from sources such as rent, allowances, fixed deposits, and others. However, senior citizens benefit from a higher exemption cap of ₹3 lakh, while super senior citizens (aged 80 and above) enjoy an even higher limit of ₹5 lakh.
Senior citizens with a valid health insurance plan and who make the required annual premium payments can claim a tax deduction of up to ₹55,000 under Section 80D of the Income Tax Act. This amount also includes expenses for annual health check-ups.
Marginal relief is provided when the surcharge payable exceeds the additional income that makes an individual liable for the surcharge. The surcharge amount cannot exceed the income exceeding ₹50 lakhs, ₹1 crore, ₹2 crores, or ₹5 crores, as applicable.
