There are several ways through which a senior citizen can earn his/her income. It can be in the form of pension, rental income, interest on savings, reverse mortgage, fixed deposit, etc. These incomes are taxed based on the category of income tax slab they fall under. Let’s read further to know how income tax is calculated for senior citizens and what are the current income tax slab rates for senior citizens in complete detail.
Income Tax Calculation for Senior Citizens for FY 2021-22
The income tax for senior citizens is computed based on the house rent allowance, basic salary, fixed allowance and other sources of income. However, a higher exemption limit is offered to the senior citizen as compared to the individuals below the age of 60 years. To calculate the income tax for senior citizens, all the income is taken into consideration along with the applicable deductions under the income tax slab rate for the financial year 2021-22.
Once all the details are collected, a senior citizen can make use of the income tax calculator to determine their taxable income. Let’s take a look at the income tax slab rates for senior citizens and super senior citizens for FY 2021-22-
Income Tax Slab Rates FY 2021 for Senior Citizens (Above 60 years but Below 80 years)- As per The Old Tax Regime
| Income Slab (in Rs.) | Income Tax Rate |
| Up to 3,00,000 | NIL |
| 3,00,000- 5,00,000 | 5% of the amount exceeding Rs. 3,00,000 |
| 5,00,000- 10,00,000 | 20% of amount exceeding Rs. 5,00,000 + Rs. 10,000 |
| 1,000,000 & Above | 30% of amount exceeding Rs. 1,000,000 + Rs. 1,10,000 |
Surcharge
- 10% of income tax where total income exceeds Rs. 50,00,000
- 15% of income tax where total income exceeds Rs. 1,00,00,000
- 25% of income tax where total income exceeds Rs. 2,00,00,000
- 37% of income tax where total income exceeds Rs. 5,00,00,000
*Health and Education Cess:- 4% of income tax and surcharge
Income Tax Slab Rates FY 2021-22 & AY 2022-23 for Senior Citizens (Above 80 Years of Age)- As per The Old Tax Regime
| Income Slab (in Rs.) | Income Tax Rate |
| Up to 5,00,000 | NIL |
| 5,00,000- 10,00,000 | 20% of amount exceeding Rs. 5,00,000 |
| 1,000,000 & Above | 30% of amount exceeding Rs. 1,000,000 + Rs. 1,00,000 |
Surcharge
- 10% of income tax where total income exceeds Rs. 50,00,000
- 15% of income tax where total income exceeds Rs. 1,00,00,000
- 25% of income tax where total income exceeds Rs. 2,00,00,000
- 37% of income tax where total income exceeds Rs. 5,00,00,000
*Health and Education Cess:- 4% of income tax and surcharge
Income Tax Slab Rate for FY 2021-2022- Applicable for New Tax Regime
| Income Slab (in Rs.) | Income Tax Rate |
| Upto 2,50,000 | NIL |
| 2,50,000- 5,00,000 | 5% of the amount exceeding Rs. 2,50,000 (Tax rebate U/S 87A is available) |
| 5,00,000- 7,50,000 | 10% of the amount exceeding Rs. 5,00,000 + Rs. 12,500 |
| 7,50,000- 10,00,000 & above | 15% of the amount exceeding Rs. 7,50,000 + Rs. 37,500 |
| 10,00,000 – 1,250,000 | 20% of the amount exceeding Rs. 10,00,000 + Rs. 75,000 |
| 12,50,000-1,500,000 | 25% of the amount exceeding Rs. 12,50,000 + Rs, 1,25,000 |
| 1500,000 & above | 30% of the amount exceeding Rs. 1,500,000 + Rs. 1,87,500 |
Note
- The tax rates in the new tax regime are the same for all categories of individuals i.e. individuals & HUF up to 60 years of age, senior citizens above 60 years to 80 years of age and super senior citizens above 80 years of age. Thus, no benefit of increased basic exemption limit benefit will be available to senior and super senior citizens in the new tax regime
- Individuals with net taxable income less than or equal to Rs. 5 lakhs will be eligible for tax exemption U/S 87A of IT Act. The tax liability will be NIL for such individuals in both, new and old tax regimes
- Irrespective of age, the basic exemption limit for NRIs is of Rs. 2.5 lakh
- In all cases, additional health and education cess of 4% will be added to the income tax liability
o A surcharge is applicable as per the tax rates mentioned above in all categories
o 10% of income tax where total income exceeds Rs. 50,00,000
o 15% of income tax where total income exceeds Rs. 1,00,00,000
o 25% of income tax where total income exceeds Rs. 2,00,00,000
o 37% of income tax where total income exceeds Rs. 5,00,00,000
Income Tax Filing for Senior Citizens
To claim the tax refund, senior citizens are required to file an income tax return. Here are ITR forms that are required to be filled by the senior citizens:
ITR I- Individual whose total income includes-
- Salary or pension
- Income from house property (excluding incidents where loss is carried forward from previous financial years)
- Income from other sources (excluding income from winning lottery and horse racing)
ITR 2- Individual whose total income includes-
- Pension or salary
- Income from house property
- Capital gains
- Income from the other sources (includes winning from lottery and horse racing)
- Incidents where the income of an individual has to be combined with the income of another individual, such as a spouse or other member
Union Budget 2022 Deductions for Senior Citizens
As per the current budget 2022, no changes have been made to the income tax bracket. The income tax deductions for senior citizens are applicable as per the old tax regime.
Health Insurance- A senior citizen can claim a deduction of a maximum of Rs. 50,000 per annum on the premium paid towards the health insurance policy under Section 80D of the Income Tax Act. In the case of dependent seniors, a deduction up to Rs. 1 lakh can be claimed under Section 80DDC for a critical illness that has been specified before.
Pension- A standard deduction of Rs. 50,000 can be claimed under Section 80D for pension. This is for pension in the form of an annuity payment that is taxable just like the salaried income.
Income Tax Benefits for Senior Citizens
Interest Income– Senior citizens who are earning an interest up to Rs. 50,000 in a financial year do not need to pay tax. This benefit is offered under Section 80TTA of the IT Act. While filing the ITR, form 15H must be submitted to avail of this benefit.
Besides this, the interest earned from the post office deposit and fixed deposits up to Rs. 50,000 can be claimed for deduction. The banks take a tax deduction at source (TDS) from interest income of such source only if it is more than Rs. 50,000 for the financial year. For total income below the tax exemption limit, Form 15H can be submitted to the bank requesting that TDS is not deducted from that financial year. This interest exemption falls under Section 80TTB of the IT Act.
Advance Tax– Senior citizens don’t need to pay advance tax during the year as they don’t have business income. They only have to pay Self-Assessment Tax (SAT), which is done after the computation of the financial tax liability for the financial year.
Reverse Mortgage– Special benefits are offered to senior citizens under the reverse mortgage scheme. Under reverse mortgage property value can be monetized to get EMIs in return, which can supplement their income. This monthly amount that is received by senior citizens is exempted from tax.
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