In the realm of income taxation in India, age plays a significant role in determining the status and applicable rules for individuals. For the purpose of income tax, an individual resident who is 60 years of age or older but less than 80 years at any point during the previous financial year is categorized as a Senior Citizen. Meanwhile, those aged 80 years or above at any time during the previous year are termed as Super Senior Citizens.
Tax Exemption for Senior Citizens
Senior Citizens aged 75 years and above have special provisions under Section 194P of the Income Tax Act, 1961. According to this section if a individual fulfil the following conditions the he/she is not required to file Income tax returns:
- Conditions for Exemption:
- The senior citizen must be 75 years or older during the previous year.
- They should be a resident of India for tax purposes.
- Their income should comprise solely of pension and interest income.
- The interest income should be earned from the same specified bank where they receive their pension.
- A declaration to this effect must be submitted to the specified bank.
- The bank, designated as a ‘specified bank’ by the Central Government, is responsible for deducting Tax Deducted at Source (TDS) considering deductions under Chapter VI-A and rebate under section 87A.
- Once TDS is deducted by the specified bank, senior citizens above 75 years are exempted from filing income tax returns.
Tax Rates for Senior Citizens (60 years or more but less than 80 years)
For senior citizens falling in the age bracket of 60 years or more but less than 80 years, the income tax rates are structured as follows under both the old and new tax regimes (u/s 115BAC):
Old Tax Regime:
| Income Tax Slab | Income Tax Rate |
| Up to ₹ 3,00,000 | Nil |
| ₹ 3,00,001 – ₹ 5,00,000 | 5% above ₹ 3,00,000 |
| ₹ 5,00,001 – ₹ 10,00,000 | ₹ 10,000 + 20% above ₹ 5,00,000 |
| Above ₹ 10,00,000 | ₹ 1,10,000 + 30% above ₹ 10,00,000 |
New Tax Regime (u/s 115BAC):
| Income Tax Slab | Income Tax Rate |
| Up to ₹ 3,00,000 | Nil |
| ₹ 3,00,001 – ₹ 6,00,000 | 5% above ₹ 3,00,000 |
| ₹ 6,00,001 – ₹ 9,00,000 | ₹ 15,000 + 10% above ₹ 6,00,000 |
| ₹ 9,00,001 – ₹ 12,00,000 | ₹ 45,000 + 15% above ₹ 9,00,000 |
| Above ₹ 12,00,000 | ₹ 90,000 + 20% above ₹ 12,00,000 |
| Above ₹ 15,00,000 | ₹ 1,50,000 + 30% above ₹ 15,00,000 |
Tax Rates for Super Senior Citizens (80 years and above)
Super Senior Citizens, aged 80 years or more, benefit from more relaxed tax rates:
Old Tax Regime:
| Income Tax Slab | Income Tax Rate |
| Up to ₹ 5,00,000 | Nil |
| ₹ 5,00,001 – ₹ 10,00,000 | 20% above ₹ 5,00,000 |
| Above ₹ 10,00,000 | ₹ 1,00,000 + 30% above ₹ 10,00,000 |
New Tax Regime (u/s 115BAC):
| Income Tax Slab | Income Tax Rate |
| Up to ₹ 3,00,000 | Nil |
| ₹ 3,00,001 – ₹ 6,00,000 | 5% above ₹ 3,00,000 |
| ₹ 6,00,001 – ₹ 9,00,000 | ₹ 15,000 + 10% above ₹ 6,00,000 |
| ₹ 9,00,001 – ₹ 12,00,000 | ₹ 45,000 + 15% above ₹ 9,00,000 |
| Above ₹ 12,00,000 | ₹ 90,000 + 20% above ₹ 12,00,000 |
| Above ₹ 15,00,000 | ₹ 1,50,000 + 30% above ₹ 15,00,000 |
Conclusion
Understanding the nuances of tax implications based on age is crucial for every taxpayer, especially senior citizens and super senior citizens. These specific tax provisions aim to provide relief and simplified compliance for elderly taxpayers. It’s advisable for senior citizens to stay updated with the latest tax regulations and consult tax advisors to optimize their tax planning strategies effectively.
