How to File Income Tax Return for Pensioners For FY 2025-26?

Pension income is eligible for exemptions under the Income Tax Act. After claiming the applicable exemptions, if the taxable income crosses the basic exemption limit, filing income tax returns is mandatory as per the provisions of the act. 

Key Highlights

• Pension income is a partially taxable income, requires ITR filing.
• Non-filing of ITR attracts fees up to Rs. 5,000 under section 234F.
• In most cases, ITR-1 is the most appropriate ITR type.

Tax on Pension Income

• Pension received after retirement can be classified into commuted and uncommuted pension. 
• Commuted pension refers to a lump sum amount that a taxpayer may choose to receive in advance by surrendering a part of their future monthly pension. This option allows the individual to get a fixed portion of their pension upfront. 
• On the other hand, uncommuted pension is the regular monthly pension received over time and is not converted into a lump sum. 
• For example, if someone opts to receive 10% of their total pension as a lump sum for 10 years, that amount is considered commuted pension, while the remaining 90% paid monthly is the uncommuted pension.

The taxability for commuted and uncommuted pension is explained below:

*Note:

• If gratuity is received: 1/3rd of commuted pension is exempt
• If no gratuity is received: 1/2 of commuted pension is exempt

Exemption from ITR filing for Pensioners

Under Section 194P - resident senior citizens aged 75 years or more do not have to file Income Tax Returns on satisfaction of certain conditions. They are as follows:

• The senior citizen must be resident
• He should not have any income other than pension income and bank interest from that pension amount.
• He should file the declaration to the bank in this regard, using the prescribed forms.
• The banks will directly deduct TDS, and such pensioners are exempted from filing ITR.

Individuals aged 80 years can also file their returns in physical manner (paper returns) instead of online mode, provided they do not have any business or professional income. The due dates are the same for physical returns as well.

How to File Income Tax Returns for Pensioners in India?

The last date to file Income Tax Return (ITR) for FY 2025-26 (AY 2026-27) is 31st July 2026 Follow the below mentioned steps to file ITR.

To file ITR for pensioners online, follow the steps given below:

1. Visit the Income Tax e-filing official website and log in by typing in your credentials.  
2. Navigate to the “e-File” tab, and from the drop-down menu, select “Income Tax Returns”
3. Click on “File Income Tax Return”
4. Select the Assessment Year and select the online mode of filing and Click on ‘Continue’.
5. Now, if you already have a pre-filled ITR, select “Resume Filing”; otherwise, click on “Start New Filing”. 
6. Choose your applicant status and press “Continue” to proceed with your application. From the drop-down menu on the right side of the screen, select ITR 1 form. (This is the ITR form for pensioners)
7. Once the screen loads, take a look at the list of required documents and select “Let’s Get Started”. 
8. Select all the appropriate checkboxes and click on “Continue”. ]
9. Select the tax regime you want to follow, i.e., the old tax regime or the new one. 
10. Review and edit the data in each section and click on ‘Continue’ to move to the next.
11. When you finish entering your income and deduction details in all the sections, click on "Proceed".
12. Now, if you have a tax liability, the screen will display all the details. You can select either “Pay Now” or “Pay Later” based on your preference.
13. On choosing "Pay Now", you have to select a banking services provider and then select "Continue". You will receive a confirmation message after successful payment. 
14. Hereafter, click on “Back To Return Filing” and click on the “Preview Return” button. 
15. Once the “Preview and Submit Your Return” page loads on the screen, click on the declaration checkbox.  Enter information related to the TRP. In case you do not have one, keep it blank. Select “Proceed to Preview” and verify all the information.
16. Click on “Proceed to Validation”. If the system shows any errors in your return, you must go back and correct 
    them. 
17. After you check/correct all the information, press “Proceed to Verification”. 
18. The “Complete your Verification” page will load, where you can choose “e-Verify Now”, “e-Verify Later” or “Verify via ITR-V”. It is recommended that you select the first option and press "Continue".
19. The screen will display a message that your ITR filing and verification have been successful. 
    In case you want to complete your e-verification later, please remember that ITRs filed after 1st August 2022, will have only 30 days for completing the verification procedure. 

Summary Of Pensioner’s ITR Form

For new pensioners, the pensioner ITR form can get a little complicated. For them, here’s the form at a glance:

• The initial part is the Personal Information section. The information provided will be automatically populated from your e-filing profile. You have the option to modify certain details if necessary.
• Then, you will arrive at the Gross Total Income section. Here, information regarding your income from salary/pension will already be present. If you are wondering how to file ITR for family pensioners, you have to select "Family pension" from the other income sources drop-down menu. 
• Hereafter, you will see the “Total Deductions” section, where you need to add and verify all the applicable deductions. 
• Then comes the "Tax Paid" section. There, you need to verify your previous year's tax payments like TDS, TCS, Self-Assessment Tax and more. 
• Next comes “Total tax Liability”, where you can preview your payable tax amount based on the information you filled in earlier.  

Final Word

Now, you have a detailed idea of how to file ITR for pensioners. Please remember, that timely filing your returns is the best way to avoid last-minute rushes and chances of late penalties.