The Buyt Desk
The income tax framework in India relies on the progressive taxation system. According to this system, people with higher income levels pay a significant percentage of their income in the form of taxes. Several provisions have been made for specific exemptions to senior and super senior citizens retired from their active professional lives.
A senior citizen is an Indian resident whose age is above 60 years and below 80 years. For people who are above 80 years or more they are considered as super senior citizens. Senior citizens get a special tax slab and enjoy more tax deductions for interest gained from bank and post office, deductions under medical insurance premiums, and more.
Basic exemption limit
The income tax benefits are quite akin for senior citizens and super senior citizens for the financial year 2023-2024, however, there are some differences in the higher basic exemption limit. The exemption limit is Rs. 3 lakh for senior citizens. So, they’ll not have to pay any tax if their income is Rs. 3 lakh or less.
The basic exemption limit is Rs. 5 lakh for super senior citizens, which is higher than that provided to senior citizens. This higher exemption limit is to ensure that super senior citizens have a higher disposable earning for their medical and other needs. The exemption limit is Rs. 3 lakh for senior citizens and super senior citizen taxpayers under the New Tax Regime.
Income Tax Slab for Super Senior Citizens Under Old Tax Regime
Super senior citizens can enjoy the benefit of old as well as new tax regimes because they have the right to choose between the two. According to the old tax regime, the tax slab rates for super senior citizens include –
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Income up to Rs. 5,00,000 no income tax
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Income Between Rs. 5,00,001 to 10,00,000 20% income tax
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Income More than Rs. 10,00,000 30% above Rs. 10 lakhs.
Income Tax Slab for Senior Citizens Under Old Tax Regime
Senior citizens have the option to pay the tax according to the old or new tax regime. Non-resident senior citizens are not eligible for the tax slabs highlighted below. The reason is that the normal provisions of income tax apply to them.
The income tax slab for senior citizens is highlighted below –
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Up to Rs. 3,00,000 slab without any tax.
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Rs. 3,00,001 to Rs. 5,00,000 with a 5% tax rate.
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Rs. 5,00,001 to Rs. 10,00,000 income slab; Rs. 10,000 and 20% of income more than Rs. 5,00,000.
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More than Rs. 10,00,000 income slab; Rs. 1,10,000 and 30% of income more than Rs. 10,00,000.
The above-mentioned tax for senior citizens and super senior citizens can be increased by Health and Education Cess at the 4% rate of the income tax. Moreover, the surcharge is applied based on the total earning as given below –
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10% surcharge rate for total income greater than Rs. 50 lakhs.
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15% surcharge rate for total income greater than Rs. 1 crore.
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25% surcharge rate for total income greater than Rs. 2 crores.
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37% surcharge rate for total income greater than Rs. 5 crores.
Under the new tax regime, the surcharge rates have been decreased to 25 percent for taxpayers having more than Rs. 5 crore income.
Income Tax Slab Rate Under New Tax Regime
Finance Act, 2020 announced a new tax regime for senior and super senior citizens. According to this new regime, they need to pay a concessional tax. They have to let go of many available deductions and exemptions.
According to the new tax regime, the income tax slab rates are –
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Up to Rs. 2,50,000; no income tax rate.
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Rs. 2,50,001 to 5,00,000; 5% income tax rate.
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Rs. 5,00,001 to 7,50,000; 10% income tax rate.
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Rs. 7,50,001 to 10,00,000; 15% income tax rate.
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Rs. 10,00,001 to 12,50,000; 20% income tax rate.
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Rs. 12,50,001 to 15,00,000; 25% income tax rate.
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More than Rs. 15,00,000; 30% income tax rate.
Senior citizens and super senior citizens are eligible for a tax rebate of Rs. 12,500 if their earning is less than Rs 5 Lakhs. It is applicable for both the tax regime.
Tax Rebate and Deductions for Senior Citizens Will let go if they pick the new tax regime are as follows-
In the old tax regime, under the section 80TTB of Income Tax Act, senior and super senior citizens are eligible for a deduction of Rs. 50,000 on income earned from interest of savings banks as well as on their fixed deposits.
Under Section 80D, health insurance premiums of Rs 50,000 can be claimed as deduction by senior and super senior citizens.
Senior and super senior citizens can claim a deduction of Rs 1 Lakh in respect of medical expenses incurred for specified diseases of self or dependent senior citizens as per the Section 80DDB of Income Tax Act.
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.
