Income tax return-filing process is a tedious task for most taxpayers, particularly for senior citizens, who often struggle with the cumbersome paperwork.
Super senior citizens – those over 80 years of age– are exempt from filing returns. People in the age group of 60-80 years do not have such leeway, but those over 75 years of age, with pension or interest income, can file form 12BBA through banks where they receive their pension, instead of filing returns.
Here’s a look at certain deductions, exemptions and tax-saving instruments that the old regime offers senior citizens.
Old regime’s higher basic exemption threshold
Senior citizens over 60 years and very senior citizens over 80 years have higher basic exemption limits of Rs 3 lakh and Rs 5 lakh, respectively, under the old, with-exemptions tax regime.
Those earning incomes up to these thresholds do not have to pay any tax. Besides, those with taxable income of up to Rs 5 lakh can claim tax rebate under the old regime, which essentially means their tax payable will be nil. Under the new, minimal exemptions tax regime, the basic exemption limit for all taxpayers is Rs 3 lakh for financial year 2024-25.
In this tax framework, those with a total income of up to Rs 7 lakh are eligible for rebate of up to Rs 25,000 under Section 87A. Pensioners are entitled to a standard deduction of Rs 75,000 against Rs 50,000 under the old regime.
Section 80C deductions
Under the old regime, the Senior Citizens’ Saving Scheme (SCSS), which is open to individuals over 60 (55 for retired civilian employees and 50 for defence employees), is eligible for deductions under Section 80C.
The investments made – up to a limit Rs 30 lakh - qualify for tax deductions of up to Rs 1.5 lakh under Section 80C. However, interest is taxable, if the total interest in all SCSS accounts exceed Rs 50,000 in a financial year. As on March 31, 2025, the rate of interest on offer is 8.2 percent per annum, payable every quarter.
Also read | Income tax filing 2024-25: Here's how salaried employees can choose between ITR-1 and 2
Deductions on health insurance, medical expenses
Senior citizens who pay health insurance premiums can avail deductions of up to Rs 50,000 under Section 80D. If children pay these premiums on behalf of their parents, they will also qualify for this deduction.
In this case, the total deduction you can claim will be Rs 75,000 (Rs 50,000 plus Rs 25,000 for self, spouse and children). If you happen to be a senior citizen who pays premiums towards your parents’ health policy, the maximum deduction you are entitled to under this section goes up to Rs 1 lakh.
Moreover, senior citizens who do not have health insurance policies or their children can avail of deductions of up to Rs 50,000 under the same section on medical expenses incurred.
Also read | Income-tax filing 2025: Why verifying AIS is a must before submitting your ITR
Higher exemption on fixed deposit interest
Under Section 80TTB, senior citizens with savings and fixed deposits in banks and post offices can avail of tax breaks of up to Rs 50,000 on the interest earned on such deposits. Interest earned beyond this limit will be subject to tax.
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