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

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In this blog, we are going to discuss the Income tax slab for Senior & Super Senior Citizen.

Budget 2024: Revised Tax Slabs and Benefits

In the 2024 budget, proposed changes to the tax slabs under the new regime include:

New regime tax rates (FY 2024-2025)
Income Slabs	Rates
Up to Rs 3 lakh	Nil
Rs 3 lakh to Rs 7 lakh	5%
Rs 7 lakh to Rs 10 lakh	10%
Rs 10 lakh to Rs 12 lakh	15%
Rs 12 lakh to Rs 15 lakh	20%
Income above Rs 15 lakh	30%

Enhanced Benefits for New Regime Taxpayers:

The Standard Deduction for salaried individuals has increased from Rs. 50,000 to Rs. 75,000.
The maximum Deduction under Family Pension has increased from Rs. 15,000 to Rs. 25,000.
The deduction on employer contributions to pension schemes under Section 80CCD (2) has increased from 10% to 14% of salary.

Senior and Super Senior Citizens:

According to the Income-tax Act, 1961, a senior citizen is aged 60 to 80 years, while a super senior citizen is 80 years or older. This article outlines the income tax provisions for resident senior and super senior citizens.

Income Tax Categories:

Individuals under 60 years
Senior citizens aged 60 to 80 years
Super senior citizens over 80 years

Income Tax for Senior Citizens:

Senior citizens over 60 years old can choose between the old and new tax regimes. The new regime, introduced by the Finance Act, 2020, offers concessional rates but requires forgoing certain exemptions and deductions. Non-resident senior citizens must follow the standard tax provisions.

Concessional Tax Rates:

Under Section 115BAC, the new tax regime offers concessional rates with specific conditions for exemptions and deductions. Under the old regime, senior citizens enjoy unconditional exemptions and deductions.

Old Tax Regime Slabs for FY 2023-24 (AY 2024-25):

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

Income Tax Slab for Super Senior Citizens

Super senior citizens, those over 80 years of age, have the option to choose between the old tax regime and the new tax regime for their income tax calculations. They can select the regime that offers the most benefits.

Old Tax Regime: Income Tax Slab Rates for Super Senior Citizens for FY 2023-24 (AY 2024-25):

Income up to INR 5,00,000: No tax
Income from INR 5,00,001 to INR 10,00,000: 20%
Income above INR 10,00,000: 30%

These rates are applicable for the assessment year 2024-25 under the old tax regime. Super senior citizens should evaluate both regimes to determine which provides the most favorable tax outcome based on their individual financial situations.

Income Tax Slab Rate as per New Tax Regime for Senior and Super Senior Citizens

The Finance Act, 2020, introduced a new tax regime offering concessional tax rates for individual taxpayers, including senior and super senior citizens. Under this regime, there are no separate tax slabs for senior or super senior citizens, but it requires forgoing many deductions and exemptions available in the old regime.

Income Tax Slab Rates as per the New Regime for FY 2023-24 (AY 2024-25):

Income slab (in Rs.)	Income tax rate
Up to Rs. 3,00,000	Nil
Rs 3,00,001 to Rs 6,00,000	5%
Rs 6,00,001 to Rs 9,00,000	10%
Rs 9,00,001 to Rs 12,00,000	15%
Rs 12,00,001 to 15,00,000	20%
Above Rs 15,00,000	30%

Additional Charges:

Health and Education Cess: 4%
Surcharge: Applicable based on total income as follows:
- Total income > INR 50 lakhs but ≤ INR 1 crore: 10%
- Total income > INR 1 crore but ≤ INR 2 crore: 15%
- Total income > INR 2 crore: 25%

Senior and super senior citizens should carefully consider both the old and new regimes to determine which offers the best tax benefits for their specific financial situation.

Income Sources for Senior and Super Senior Citizens:

Common sources include savings account interest, pensions, fixed deposits, rental income, senior citizen saving schemes, capital gains, reverse mortgages, and post office deposit schemes.

Forgone Benefits under the New Regime:

Various allowances and deductions, including LTA, HRA, conveyance, children’s education, and more
Higher income exemption limits (Rs. 3,00,000 and Rs. 5,00,000)
Interest on housing loans under Section 24
Deductions under Chapter VI-A, except for specific contributions under Sections 80CCD(2), 80CCH, and 80JJAA

Available Benefits under the Old Regime:

Higher Income Exemption Limit: Rs. 3,00,000 for senior citizens and Rs. 5,00,000 for super senior citizens.
Standard Deduction: Rs. 50,000 for salary or pension income.
Tax Rebate under Section 87A: Up to Rs. 5,00,000 taxable income for senior citizens and up to Rs. 7 lakhs under the new regime.
Higher Medical Insurance Deduction: Up to Rs. 50,000 for premiums under Section 80D.
Specified Disease Treatment Deduction: Flat deduction of Rs. 1,00,000 under Section 80DDB.
Bank and Post Office Interest Deduction: Up to Rs. 50,000 under Section 80TTB.
Exemption from Advance Tax: If no business or professional income.
Reverse Mortgage Scheme Benefits: No capital gains tax on house transfer.
Senior Citizens Savings Scheme Deduction: Up to Rs. 1,50,000 under Section 80C.

When Senior Citizens are Exempt from Filing Returns:

Age 75 or older
Income from pension and interest only
Declaration submitted to the bank, which deducts TDS under Section 194P

Tax Calculation for Senior Citizens:

Aggregate gross total income is calculated from all sources.
Deductions and exemptions under the old regime reduce tax liability, including:
- Section 80C: Up to Rs. 1.5 lakhs for eligible investments and expenses.
- Section 80CCC: Premiums for specified pension plans, with a combined limit with Section 80C.
- Section 80CCD(1B): Additional deduction of Rs. 50,000 for NPS investments.
- Section 80D: Health insurance premiums up to Rs. 50,000.
- Section 80DD: Expenses for disabled dependents, with fixed deductions.
- Section 80DDB: Expenses for specified illnesses, up to Rs. 1 lakh.
- Section 80G: Donations to charitable causes.
- Section 80GGC: Contributions to political parties or electoral trusts.
- Section 80RRB: Royalties from registered patents, up to Rs. 3 lakhs.

Deduction under Section 80C

Under Section 80C, senior citizens and super senior citizens can claim deductions up to INR 1.5 lakhs from their gross total income for qualifying investments and expenditures. Some popular investments covered under this section include:

5-year fixed deposits
Equity Linked Savings Scheme (ELSS)
Public Provident Fund (PPF)
Life insurance premiums (LIP)
Senior Citizen Saving Scheme (SCSS)
National Saving Certificates (NSC), among others.

Deduction under Section 80CCC

Premiums paid towards a specified pension plan are eligible for deductions under Section 80CCC, with a combined maximum limit of INR 1.5 lakhs along with Section 80C. An additional deduction of INR 50,000 is available under Section 80CCD(1B), and contributions made by the employer can be claimed under Section 80CCD(2), with a limit of 10% of salary for most employees and 14% for government employees. The tax benefit under Section 80CCD(2) is also applicable under the new tax regime proposed in Budget 2020.

Deduction under Section 80CCD(1B)

Investments in the National Pension Scheme (NPS) can be deducted up to INR 50,000 under Section 80CCD(1B), in addition to the deductions available under Sections 80C and 80CCC. NPS accounts must be opened before the age of 65.

Deduction under Section 80D

Health insurance premiums paid for senior citizens or super senior citizens are deductible up to INR 50,000 under Section 80D. Additionally, expenses for preventive health checkups up to INR 5,000 can be claimed. If no health insurance is taken, medical expenses paid in non-cash modes for senior citizens can be claimed under this section.

Deduction under Section 80DD

Expenses for the treatment or maintenance of a disabled dependent can be claimed under Section 80DD, with a deduction limit of INR 75,000. For severe disabilities (80% or more), the limit increases to INR 1.25 lakhs.

Deduction under Section 80DDB

Expenses incurred for treating specified illnesses are covered under Section 80DDB. Senior citizens or their dependents with pre-specified diseases can claim actual expenses up to INR 1 lakh from FY 2018-19 onwards.

Deduction under Section 80G

Donations to specified charitable causes and institutions are deductible under Section 80G. The deduction can be 50% or 100% of the donated amount, depending on the charity.

Deduction under Section 80GGC

Contributions to political parties or electoral trusts are deductible under Section 80GGC. Cash donations are not eligible for this deduction.

Deduction under Section 80RRB

Royalty incomes from registered patents are deductible under Section 80RRB, with a maximum deduction of INR 3 lakhs. The patent must be registered on or after April 1, 2003, under the Patents Act 1970. A certificate (Form-10CCE) signed by the prescribed authorities is required to claim this deduction.

Deduction under Section 80TTB

Interest earned from bank or post office deposits, including savings accounts and fixed deposit schemes, can be deducted up to INR 50,000 under Section 80TTB for senior citizens or super senior citizens.

Deduction under Section 80U

Senior citizens or super senior citizens with disabilities can claim a deduction under Section 80U. The amount is fixed at INR 75,000, increasing to INR 1.25 lakhs for severe disabilities.

Besides these deductions under Chapter VI A of the Income Tax Act, reverse mortgage loan amounts received by senior citizens or super senior citizens are not taxable. The EMI payments from a reverse mortgage continue throughout the lifetime of the senior citizen, providing a regular inflow of funds. Upon their death, the property is sold to repay the loan.

Moreover, resident senior citizens and super senior citizens without income from business or profession are exempt from paying advance tax. They file their returns through self-assessment tax after the financial year ends. After aggregating their income and deducting eligible deductions, the taxable income is determined and taxed according to the applicable tax slab.

You can use the Income Tax Calculator to determine your tax liabilities.

Conclusion

Filing an income tax return is essential for declaring your total income and supporting the nation’s development. It funds critical infrastructure and services such as healthcare and defense. Meeting tax obligations on time helps avoid penalties and legal issues, and filing a return holds significant legal value as an official record with the government.

FAQ’s

Is ITR Filing Mandatory for Senior Citizens?

Yes, senior citizens are required to file income tax returns. However, those over 75 years of age, whose income consists solely of pension and interest from the same bank, are exempt from filing income tax returns provided they submit a declaration under Form 12BB.

Can senior citizens claim deduction under 80DDB?

Senior citizens or super senior citizens, or their dependents, can claim a deduction under Section 80DDB for expenses incurred on specific illnesses.

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

Senior citizens must file ITR-1 if their income consists of:

Salary or pension
Rent from residential property
Income from other sources such as interest

However, if their income includes salary or pension, rent from residential property, income from the sale of capital assets such as shares or property, or income from other sources, they must file ITR-2.

Can senior citizens file an offline ITR?

Filing ITR for Super Senior Citizens over 80 years of age have the option to file their income tax returns using ITR-1 or ITR-4 through the offline mode.

Can senior citizens claim deductions under sec 80C to 80U if they opt for the new tax regime?

Senior citizens can claim deductions under Sections 80C to 80U if they opt for the old tax regime. However, if they choose the new tax regime, they can only avail deductions under Section 80CCD(2) for employer contributions to NPS, Section 80CCH for contributions to the Agniveer Fund, and Section 80JJAA for the employment of new employees.

Can senior citizens claim deduction under 80DDB?

For specific covered illnesses, senior citizens or super senior citizens, or their dependents, can claim a deduction under Section 80DDB.

What is the income tax rebate for senior citizens for fy 2023 24?

For the financial year 2023-24, senior citizens are eligible for the following income tax rebates:

Basic Exemption Limit: Senior citizens (aged 60 to 79 years) have a higher basic exemption limit of INR 3,00,000. Super senior citizens (aged 80 years and above) have an even higher exemption limit of INR 5,00,000.
Section 87A Rebate: If the total income of a senior citizen (both senior and super senior) does not exceed INR 5,00,000, they are eligible for a rebate under Section 87A. This rebate is up to INR 12,500, effectively making their tax liability nil if their income is up to INR 5,00,000 after deductions.
Section 80TTB Deduction: Senior citizens can claim a deduction of up to INR 50,000 on interest income from savings accounts, fixed deposits, and recurring deposits under Section 80TTB.

These rebates and deductions help reduce the overall tax burden for senior citizens.