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Income Tax Slab For Senior Citizen & Super Senior Citizen FY 2022-23

Updated on: Feb 7th, 2023 - 10:03:26 AM

18 min read

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As per Income Tax Act, 1961, senior citizen is an Indian resident whose age is 60 years or more but less than 80 years. While a super senior citizen is an Indian resident whose age is 80 years or more. This article briefly explains all the income tax provisions applicable to the resident senior citizen and super senior citizen.

Income Tax Act has categorized resident individuals into 3 parts-

  1. Individuals whose age is up to 60 years
  2. Senior citizens - Individuals whose age is 60 to 80 years
  3. Super senior citizens - Individuals over 80 years of age

Income Tax Slab For Senior Citizen

Senior citizens over 60 years of age have an option to pay the tax as per the old or new tax regime. A new tax regime is introduced by the central government via Finance Act, 2020, whereby concessional tax rates are introduced which is explained in the later part of the article. However, non resident senior citizens are not eligible for the below mentioned tax slabs as the normal provisions of income tax are applicable to them.

As per old tax regime, the income tax slab rates for senior citizen for FY 2022-23 are as follows-

Income slab (in Rs.)Income tax rate
Up to Rs. 3,00,000Nil
3,00,001 to 5,00,0005% of income over Rs. 3,00,000
5,00,001 to 10,00,000Rs. 10,000 + 20% of income over Rs. 5,00,000 
Above 10,00,000Rs. 1,10,000 + 30% of income over Rs. 10,00,000

Income Tax Slab For Super Senior Citizen

Super senior citizens over 80 years of age can also avail the benefit of old and new tax regime as they have the choice to opt between the two, whichever is more beneficial.

As per old tax regime, the income tax slab rates for super senior citizen for FY 2022-23 are as follows-

Income slab (in Rs.)Income tax rate
Up to Rs. 5,00,000Nil
5,00,001 to 10,00,00020% of income over Rs. 5,00,000
Above 10,00,000Rs. 1,00,000 + 30% of income over Rs. 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, surcharge is applicable on the basis of total income as follows:

Total income Surcharge rate
> Rs. 50 Lakhs10%
> Rs. 1 crore15%
> Rs. 2 crore25%
> Rs. 5 crore37%

*surcharge rates has been reduced to 25% under the new tax regime for taxpayers earning more than Rs 5 crore.

Income Tax Slab Rate As Per New Tax Regime For Senior And Super Senior Citizen 

Finance Act, 2020 introduced a new tax regime for the senior citizen and super senior citizen according to which concessional tax is to be paid by them. However, they have to forgo many deductions and exemptions available to them.

The income tax slab rate as per new regime is:

Income slab (in Rs.)Income tax rate
Up to Rs. 2,50,000Nil
2,50,001 to 5,00,0005%
5,00,001 to 7,50,00010%
7,50,001 to 10,00,00015%
10,00,001 to 12,50,00020%
12,50,001 to 15,00,00025%
Above 15,00,00030%

The health and education cess as well as surcharge remains the same. 

Benefits To Be Forgone By The Senior And Super Senior Citizen In Case They Avail The Benefit Of New Tax Regime

  • Benefit of higher income exemption limit of Rs. 3,00,000 and Rs. 5,00,000
  • Leave Travel Allowance
  • House Rent Allowance (HRA)
  • Conveyance Allowance
  • Children Education Allowance
  • Daily expenses in the course of employment
  • Relocation allowance
  • Helper allowance
  • Other special allowances
  • Standard deduction of Rs. 50,000 on salary
  • Professional tax
  • Interest on housing loan (Section 24)
  • Deduction under Chapter VI-A such as 80C, 80D, 80E, 80TTB, etc. However, they can avail deduction under Section 80CCD(2) i.e. notified pension scheme and 80JJAA i.e. deduction for employment of new employees

Benefits Available To The Senior And Super Senior Citizen

Senior and super senior citizens are eligible to avail numerous tax benefits as offered by Income Tax Act, 1961 as are described below:

  1. Higher income exemption limit

Senior citizens are required to pay tax over the income of Rs. 3,00,000 while this limit is Rs. 5,00,000 for super senior citizens. This benefit is not available for the ordinary individuals as the limit is Rs. 2,50,000 for them.

  1. Standard deduction

If they are earning salary or pension income, they can claim a deduction of Rs. 50,000 from such income.

  1. Tax rebate under Section 87A

In case of senior citizens, if taxable income is up to Rs. 5,00,000, then they can claim rebate from tax i.e. they are not required to pay any tax.

  1. Higher deduction for medical insurance premium

Senior citizens can claim deduction up to Rs. 50,000 for medical insurance premium under Section 80D instead of Rs. 25,000 which is available to other individuals on a condition that it is paid through online banking channels.

  1. Higher deduction in respect of expenses incurred for treatment of specified diseases or ailment

They can claim a flat deduction of Rs. 1,00,000 in respect of medical expenses incurred for specified diseases of self or dependent senior citizen relatives as specified in the Act under Section 80DDB.

  1. Higher deduction in respect of bank and post office interest

Senior citizens taxpayers can claim a total deduction up to Rs. 50,000 in respect of interest earned from savings bank accounts, bank deposits, post office deposits or cooperative banks under Section 80TTB. While people below 60 years of age can claim deduction only up to Rs 10,000 on interest earned in savings bank account.

  1. Exemption from advance tax payment

Senior citizens are not required to pay advance tax if they do not earn any income from business or profession. Therefore, no interest is levied on late payment of advance tax. 

  1. When are senior citizens not required to file income tax return?

Senior citizens are not required to file income tax return subject to following conditions:

  • Their age is 75 years or more
  • Total income consists of only pension and interest income. Interest income can be from any account maintained with the same bank in which they receive pension.
  • They have submitted a declaration to the bank
  • TDS is deducted by such bank under Section 194P
  1. Benefit of Reverse Mortgage Scheme

If a senior citizen transfers his house under reverse mortgage scheme where he receives monthly installments, he is not required to pay any capital gains tax on such transfer of house.

  1. Deduction on investment in Senior Citizens Savings Scheme

Senior citizens over 60 years of age can invest in the Senior Citizens Savings Scheme and save tax by claiming deduction up to Rs. 1,50,000 under Section 80C. This scheme also ensures regular interest payouts. Recently the government has introduced an interest rate of 8% for the January to March quarter of the year 2022-23. 

FAQs

Is ITR filing mandatory for senior citizens?

Yes, senior citizens have to mandatorily file income tax return. However, senior citizens over 75 years of age, whose income consists of only pension and interest income from the same bank are exempted from filing income tax return.

Which ITR form is required to file the income tax return of senior citizens?

Senior citizens have to file ITR-1 if their income consists of salary or pension, rent from residential property, or income from other sources such as interest. However, if their income includes salary or pension, rent from residential property, income from sale of capital assets such as shares or property or income from other sources, then, they have to file ITR-2.

 Can senior citizens file an offline ITR?

Super senior citizens over 80 years of age have an option to submit ITR-1 or ITR-4 through offline mode.

Can senior citizens claim any deduction from the pension income?

Yes, senior citizens can claim a standard deduction of Rs. 50,000 from pension or salary income.

Is interest earned on the Senior Citizen Savings Scheme eligible for any deduction or tax benefit?

Yes, the interest earned on Senior Citizen Savings Scheme is eligible for deduction up to Rs. 50,000 under Section 80TTB.

How much interest on FD is eligible for tax deduction for senior citizens?

Senior citizens can claim a deduction of Rs. 50,000 on interest received on fixed deposit under Section 80TTB. 

What is the tax slab for non resident (NRI) senior citizens?

Non resident senior citizens over 60 years of age cannot avail the benefits available to resident senior citizens. Therefore, tax slab applicable to normal individuals below 60 years of age is applicable to NRI senior citizens. They have to pay tax if their income exceeds Rs. 2,50,000. 

Can a non resident senior citizen claim rebate under Section 87A?

No, NRI senior citizens are not eligible to claim the rebate under Section 87A. Therefore, they have to pay tax if their income is exceeding Rs. 2,50,000.

What is the tax rate in case of capital gains made by senior citizens or what is the tax rate in case of sale of shares by senior citizens?

Tax slab rates are not applicable in case of capital gains, therefore, in case of listed equity shares if shares are sold within a year, 15% tax rate is applicable under Section 111A and if shares are sold after 1 year, 10% tax rate is applicable under Section 112. On the other hand, in case of sale of unlisted shares, tax is to be paid as per the prescribed slab rates if shares are sold within 2 years and tax rate is 20% in case shares are sold after a period of 2 years.

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