Income Tax Slab For Senior Citizen & Super Senior Citizen FY 2023-24 (AY 2024-25)

The income tax slabs vary for senior and super senior citizens under the old regime, whereas the tax slabs are the same in the new regime irrespective of their age. In this article, we will learn about the tax slabs applicable to the senior and super senior citizens under the old and the new tax regime. 

Budget 2024 Updates

The following benefits have been extended to the taxpayers who opt for the new tax regime:

• In Budget 2024, the tax slabs under the new regime have been revised. 
• Limit of Standard Deduction against salaried income has been increased from Rs. 50,000 to Rs. 75,000.
• Limit of maximum Deduction under Family Pension has been increased from Rs. 15,000 to Rs. 25,000. 
• The deduction on employers contribution to pension Scheme as per Section 80CCD (2) has been increased from 10% of salary to 14% of salary.

As per Income-tax Act, 1961 senior citizen is an individual whose age is 60 years or more but less than 80 years. While a super senior citizen is an individual 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-

• Individuals whose age is up to 60 years
• Senior citizens - Individuals whose age is 60 to 80 years
• 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 tax as per the old or the new tax regime. The 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.

If an Individual is paying tax under the new tax regime, concessional tax rates are prescribed under section 115BAC with conditions to claim exemptions, deductions and losses. However, under the old tax regime, senior citizen individuals can enjoy unconditional claim of exemptions and deductions.

As per the old tax regime, the income tax slab rates for senior citizens for FY 2023-24 and FY 2024-25 (AY 2024-25 and AY 2025-26) are as follows-

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 the old tax regime, the income tax slab rates for super senior citizen for FY 2023-24 and FY 2024-25 (AY 2024-25 and AY 2025-26) are as follows:

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:

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

Finance Act, 2020 introduced a new tax regime for individual taxpayers, according to which concessional tax is to be paid by them. This regime does not differentiate between senior and super senior citizens in terms of tax slabs. However, they have to forgo many deductions and exemptions available to them.

The income tax slab rate as per the new regime for FY 2023-24 (AY 2024-25) is:

According to the announcement made by Finance Minister, Nirmala Sitharaman in the Union Budget 2024, the income tax slab rate as per the new regime for FY 2024-25 (AY 2025-26) is:

The health and education cess remains the same at 4%. The surcharge is applicable on the basis of total income as follows:

Note : The CBDT has clarified that a person born on 1st April would be considered to have attained a particular age on 31st March, the day preceding the anniversary of his birthday. In particular, the question of attainment of age of eligibility for being considered a senior/very senior citizen would be decided on the basis of above criteria. Therefore, a resident individual whose 60th birthday falls on 1st April, 2024, would be treated as having attained the age of 60 years in the FY 2023-24 and would be eligible for higher basic exemption limit of 3 lakh while computing his tax liability for AY 2024-25 under the old tax regime. Likewise, a resident individual whose 80th birthday falls on 1st April 2024 would be treated as having attained the age of 80 years in the FY 2023-24 and would be eligible for higher basic exemption limit of Rs. 5 lakh in computing his tax liability for AY 2024-25 under the old tax regime.

Sources of Income for Senior and Super Senior Citizens

Senior and super senior citizens usually earn income 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 interest, and many others 

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
• Professional tax and Entertainment allowance
• Interest on housing loan (Section 24) on self-occupied property
• Deduction under Chapter VI-A such as 80C, 80D, 80E, 80TTB, etc. However, they can avail deduction under Section 80CCD(2) i.e. employer contribution to NPS, 80CCH contribution to Agniveer fund 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 under the old tax regime. This benefit is not available for the ordinary individuals as the limit is Rs. 2,50,000 for them.

     2. Standard deduction

If they are earning salary or pension income, they can claim a deduction of Rs. 50,000 from such income. For FY 2024-25 the standard deduction amount has been increased to Rs. 75,000 under the new tax regime. 

     3. Tax rebate under Section 87A

In the case of senior citizens, if taxable income is up to Rs. 5,00,000, then they can claim rebate from tax under the old tax regime, i.e. they are not required to pay any tax. Whereas under the new tax regime, the total income limit is upto Rs. 7 lakhs and rebate can be claimed upto Rs.25,000. 

    4. Higher deduction for medical insurance premium

Senior citizens can claim a deduction up to Rs. 50,000 under the old tax regime for medical insurance premium under Section 80D instead of Rs. 25,000, which is available to other individuals on the condition that it is paid through online banking channels. The same deduction cannot be claimed under the new tax regime.

     5. Higher deduction in respect of expenses incurred for treatment of specified diseases or ailments

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.

     6. 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.

     7. 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.

     8. 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.

     9. 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 a deduction up to Rs. 1,50,000 under Section 80C under the old tax regime. This scheme also ensures regular as well as higher interest payouts. The same deduction cannot be claimed under the new tax regime.

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

Conclusion

Filing an income tax return is an important way to declare your total income and contribute to the nation's development. It helps the government fund infrastructure and essential services such as healthcare and defense. Meeting all tax obligations before the due date is crucial to avoid penalties and legal consequences. Additionally, filing an income tax return holds significant legal value as it is an official record with the government.