Income Tax News: All Indian citizens, whether they are employed, not, or are senior citizens, are required to file income tax returns. As per the Income Tax department, a resident who turns 60 years old or older but was under 80 years old at any point in the preceding year is classified as a Senior Citizen for Income Tax purposes. An individual resident who was 80 years of age or older at any point in the previous year is considered a Super Senior Citizen.
Classification for Tax Purposes
The provisions of the Income-Tax Act of 1961 state that seniors and super seniors receive higher tax benefits than general taxpayers. This is a comparison of senior citizen tax slabs under the Old and New Tax Regimes.
Old Tax Regime
For senior citizens, the basic exemption limit is Rs 3 lakh; for general taxpayers, it is Rs 2.50 lakh. The upper limit for extremely senior citizens in a given fiscal year is Rs 5 lakh. According to the Income Tax Act of 1961, senior citizens are required to pay advance tax if their estimated tax liability for a given financial year is Rs 10,000 or more. As long as they do not have any income under the “Profits and Gains of Business or Profession” head, senior citizens are exempt from paying any advance tax. Like regular taxpayers, seniors can deduct a standard amount up to Rs 50,000 from their pension income.
- Senior citizens with annual incomes up to Rs 3 lakh are exempt from taxation under the Old Tax Regime.
- The tax obligation is 5% for individuals whose income is greater than Rs 3 lakh but less than Rs 5 lakh.
- It should be noted that under the Old Tax Regime, there is no tax obligation if the taxable income is up to Rs 5 lakh and there is relief under Section 87A.
- The tax rate on income exceeding Rs 5 lakh up to Rs 10 lakh is Rs 10,000 plus 20% of the amount exceeding Rs 5 lakh.
- The tax rate on amounts over Rs 10 lakh is Rs 1.10 lakh plus thirty percent of that amount.
- If the taxable income exceeds Rs 50 lakh, there will be a surcharge that could range from 10 to 37 percent, depending on marginal relief.
- In addition, there is a health and education cess, which consists of a surcharge plus 4% of income tax.
For Super Seniors
- Taxes are 0% on income up to Rs 5 lakh.
- It is 20% above Rs 5 lakh for income over Rs 5 lakh up to Rs 10 lakh.
- The tax rate on income exceeding Rs 10 lakh is Rs 1 lakh plus 30% of that amount.
- The senior citizen surcharge, health, and education cess are the same.
New Tax Regime
There are additional tax slabs under the New Tax Regime for senior and super senior citizens. Senior and super-senior citizens pay income tax at the same rates and slabs under Section 115BAC of the New Tax Regime.
- There is no tax on income under Rs 3 lakh.
- It is five percent for income over Rs 3 lakh and up to Rs 6 lakh.
- It is 10% of the amount over Rs 6 lakh to Rs 9 lakh.
- 15% of the amount over Rs 9 lakh to Rs 12 lakh.
- It is 20% over Rs. 12 lakh to Rs. 15 lakh.
- If you exceed Rs 15 lakh, thirty percent
Health Insurance Premium Deduction (Section 80D)
Seniors can deduct up to Rs. 50,000 from their health insurance premiums under section 80D of the new tax law. In a fiscal year, the amount entitled in case of expenses incurred for a dependent senior citizen is Rs 1 lakh. Under section 80TTA, taxpayers who are senior or super-senior citizens may deduct up to Rs 50,000 in interest income from savings bank accounts. The amount for regular taxpayers is Rs 10,000.
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