Income Tax For Senior Citizens 2022-2023

Senior citizens in India earns income from various avenues, such as pensions, interest from investment products, rental income, etc. Such proceeds are eligible for income tax, a major revenue source for the Government of India.

Tax Exemption for Senior Citizens

The income earned by senior citizens is eligible for some income tax exemptions. Eligible senior citizens apply for tax exemptions. In India, senior citizens are eligible for certain tax benefits. These include a higher basic exemption limit, a deduction on medical expenses, and rebates.

1. Higher basic exemption limit: Senior citizens are allowed a higher exemption than general citizens below 60 years. 
2. Deduction on Medical Expenses: Senior citizens are allowed a deduction on medical expenses. This applies to the medical treatment of the senior citizen, dependent parents or spouse. 
3. Rebates: Senior citizens are eligible for rebates under Section 87A of the Income Tax Act. The applicability of these rebates is subject to the annual income of the senior citizen. 

Senior Citizens Tax Slabs for FY 2022-2023

The following table showcases the Senior Citizens tax slabs set for Citizens as per their income.

Income Tax Slabs	Tax Rate
Up to Rs 2,50,000	None
Rs 2,50,001 to Rs 5,00,000	5%
Rs 5,00,01 to Rs 7,50,000	10%
Rs 7,50,001 to Rs 10,00,000	15%
Rs 10,00,001 to Rs 12,50,000	20%
Rs 12,50,001 to Rs 15,00,000	25%
Above Rs 15,00,000	30%

 

• Tax exemption limit on income tax is determined up to Rs 2.5 Lakhs. 
• If the income is more than Rs 50 Lakhs or up to Rs 1 Crores, surcharges are applicable at 10%. 
• Surcharge of 15% on income tax is applicable if the total income exceeds Rs 1 Crores. 

Super Senior Citizens Tax slabs (more than 80 years of age) for FY 2022-2023

The following table showcases Super Senior Citizens tax slabs set by the government.

Income Tax Slabs	Tax Rate
Up to Rs 2,50,000	None
Rs 2,50,001 to Rs 5,00,000	5%
Rs 5,00,01 to Rs 7,50,000	10%
Rs 7,50,001 to Rs 10,00,000	15%
Rs 10,00,001 to Rs 12,50,000	20%
Rs 12,50,001 to Rs 15,00,000	25%
Above Rs 15,00,000	30%

Income Tax Calculation for Senior Citizens FY 2022-23

The Income Tax for senior citizens can be calculated after accounting for their revenues from various sources. An individual must account for their basic income, rental income, fixed income and any other source of income. The exemption limit set for senior citizens is higher when compared to general citizens. 

Income tax is computed after accounting for all the income along with eligible deductions and income tax slab set for the financial year 2022-23. After mentioning the details, the calculator will provide taxable income. It is to be noted that under the latest tax regime, there are no higher tax exemption limits for Senior and Super Senior Citizens. 

Income Tax Filing for Senior Citizens

To claim tax returns, the individuals are required to file their income tax returns with the authorities. A citizen can obtain the following Income Tax Return forms that are to be filled by the senior citizens duly. 

ITR 1 – Individuals whose total income entails: 

• Salary or Pension 
• Income from Real Estate 
• Income from other sources such as lottery winnings. 

ITR 2- Individuals whose total income entails: 

• Salary or Pension 
• Income from house and properties. 
• Capital gains 
• Income from sources such as lottery winnings. 

Senior Citizens Tax Exemptions

In India, senior citizens are granted tax exemptions under Section 80D of the Income Tax Act. This exemption is available to taxpayers who are over the age of 60 and not earning an income. According to this section, senior citizens are eligible for a deduction on their total income, whichever is less, on medical insurance premiums paid for themselves or their parents. 

They are also eligible for an additional deduction on any expenses related to medical treatments. In addition to these deductions, senior citizens are exempt from filing income tax returns.

It is to be noted that their income is accounted for from only one of the following sources: pension, interest on fixed deposits, or other investments such as a bank savings account. To avail of these tax exemptions, senior citizens must ensure that they have all the necessary documents, such as age proof, income proof, and other documents required by the tax authorities.

1. Income Tax Exemption: Senior citizens aged 60 years and above are eligible for income tax exemptions under Section 80TTB.
2. Discounts on Air Travel: Senior citizens of India can avail of discounts on domestic air travel booked through Air India, Vistara, and SpiceJet airlines.
3. Discounts on Railway Travel: Senior citizens who are 60 years and above can avail of a concession of 40% on the base fare in reserved classes of train tickets.
4. Discounts on Hotel Bookings: Senior citizens can avail of up to 30% discounts on their hotel bookings.
5. Discounts on Medical Treatment: Senior citizens can avail of discounts on medical treatment in government hospitals and dispensaries.
6. Tax Exemption on Investment: Senior citizens can avail of income tax exemption on the interest income from fixed deposits, post office savings, and recurring deposits.
7. Concessional Rate of Interest on Loans: Senior citizens can avail of loans from banks at a concessional rate of interest.
8. Tax Exemption on Life Insurance Premiums: Senior citizens can avail of tax exemption on the premium paid for life insurance policies.

Income Tax Benefits for Senior Citizens

Senior Citizens in India can avail of the following benefits on Income Tax.  

1. Age relaxation: Senior citizens are given age relaxation to claim various tax benefits. They can claim tax benefits under various sections of the Income Tax Act, such as Section 80C, Section 80D and others, at 60 years instead of 65 years. 
2. Higher exemption limit: Senior citizens can claim a higher exemption limit when compared to general citizens. 
3. Tax rebates: Senior citizens are eligible to claim tax rebates on their total income under Section 87A. 
4. Tax deduction on health insurance: Senior citizens are allowed to claim tax deductions of up to Rs 50,000 under Section 80D for the premium paid towards health insurance.
5. Tax deduction on interest income: Senior citizens can claim a tax deduction of up to Rs 50,000 on the interest income earned in a financial year under Section 80TTB. 
6. Deduction on rent paid: Senior citizens can claim a tax deduction of up to Rs 60,000 per annum on rent paid for self-occupied property under Section 80GG.

Exemption on Reverse Mortgage Scheme

A reverse mortgage is a type of home loan that allows senior citizens to borrow money against the equity in their home. Under the new reverse mortgage scheme, senior citizens will be exempt from paying any taxes on the money they borrow. This will allow them to keep more of their hard-earned equity and use it for their retirement needs. The scheme is a win-win for both the borrower and the lender, and it will help to ease the financial burden on senior citizens.

What is Section 194P of the Income Tax Act 1961?

As per Section 139 of the Income Tax Act, individuals must produce their documents to showcase their gross income if their annual income exceeds the basic exemption limit set by the authorities.

To provide relief to senior citizens while they file compliance for ITR, Section 194P was introduced by the Government of India. The section allows the bank to deduct the TDS directly from the specified bank account of a specified senior citizen. It is to be noted deductions under Chapter 6-A and rebates under Section 87A are considered for the eligible senior citizen. 

What is the Eligibility of Income Tax for Senior Citizens in India?

In India, senior citizens are individuals residing in the country aged between 60 and 80 years. This age group is eligible for income tax rebates under section 87A of the Income Tax Act. They are eligible for income tax rebates if their total taxable income does not exceed the basic exemption limit. Senior citizens are also eligible for a higher exemption limit for income tax.

Who Is Considered a Super Senior Citizen in India for Income Tax?

In India, super senior citizens are individuals that are aged above 80 years. They are eligible for rebates and deductions if their income exceeds the basic exemption limit. The government aims to provide relaxation to the super senior citizens regarding taxes.

Related Resource

Deductions Under Section 80C

Income Tax Slabs and Rates

Income Tax Refund Status

Income Tax e-filing

ITR – Income Tax Return