As the new financial year progresses, income tax filing for FY2024–25 (AY2025–26) becomes a priority for many individuals, especially senior citizens. With rising healthcare costs and fixed incomes from pensions or savings, tax relief becomes an essential support system for older taxpayers. Fortunately, the Indian Income Tax Act recognises these concerns and offers a range of exemptions and deductions specifically tailored for individuals aged 60 and above.
Senior citizens in India enjoy not only higher exemption limits but also additional benefits such as deductions on medical expenses, interest income, and even an option to skip income tax return filing under specific conditions. These provisions aim to ease the compliance burden and provide meaningful financial relief. However, understanding which deductions apply, and under which regime—old or new—is crucial for making the most of these benefits.
Who qualifies as a senior citizen
For income tax purposes, an individual who is 60 years or older at any point during the financial year is treated as a senior citizen. Those who are 80 years or above are categorised as super senior citizens. These classifications entitle individuals to higher basic exemption limits and additional tax deductions under the old tax regime.
Basic exemption limits
In the earlier tax regime, senior citizens in the age group of 60 to 79 are exempted from paying tax on their income up to Rs 3 lakh. For super senior citizens aged 80 and above, exemption is at Rs 5 lakh. In the new regime, however, everyone is taxed equally, including senior citizens. The minimum exemption limit in the new regime is Rs 3 lakh for everyone, but it will increase to Rs 4 lakh from FY26. People choosing the old regime would gain more with these increased exemption levels.
Section 80D: Medical insurance and health check-ups
Senior citizens can claim a deduction of up to Rs 50,000 on paid health insurance premium on insurance policies. If a person cannot get insured due to age or a pre-existing disease, out-of-pocket medical expenses can be claimed under this limit in its place. Preventive health check-ups are also exempted under this limit, provided that aggregate expenditure, including the cost of a check-up, is below Rs 50,000 in a year.
Section 80DDB: Deduction in respect of treatment of specified ailments
Under this section, there is a deduction of Rs 1 lakh for the treatment of specified serious diseases such as cancer, chronic kidney disease, and neurological disorders. In order to avail this benefit, the senior citizen must obtain a certificate from a specialist in a government hospital verifying the ailment and the treatment.
Section 80TTB: Deduction in respect of interest on deposits
Senior citizens are eligible to a deduction of a maximum of Rs 50,000 on interest received on savings accounts, fixed deposits, or recurring deposits with banks, post offices, or cooperative banks. This is a special privilege offered solely to senior citizens and not to those who are younger than 60 years.
Section 194P: Waiver of ITR filing for specific 75+ pensioners
Individuals who are 75 years and above may be exempted from filing their income tax returns if they receive pension and interest income alone, and both are the same bank. Here, the individual is to make a declaration before the bank, which will compute and deduct the tax due. The above exclusion is valid only if there is no other income.
Other tax deductions which are available for senior citizens
Senior citizens can also claim deduction under Section 80C up to a maximum of Rs 1.5 lakh if they invest in schemes such as Public Provident Fund (PPF), Senior Citizens Savings Scheme (SCSS), Equity-Linked Saving Schemes (ELSS), life insurance premium, or repayment of housing loan principal. They can also claim a further deduction of Rs 50,000 under Section 80CCD(1B) for investment in National Pension System (NPS). If they are supporting a dependent with disability, they are eligible to claim a deduction under Section 80DD. For this, they can claim Rs 75,000 in case of general disability and Rs 1.25 lakh in case of severe disability. Contributions to approved charitable trusts are also deductible under Section 80G, with some limits of eligibility.
No liability of advance tax
The senior citizens who do not earn income from business or professional services are not required to pay advance tax. They can pay their entire tax amount by paying self-assessment tax in advance of the date for filing returns, simplifying the process a great deal.
Form 15H to avoid TDS
If the overall income of a senior citizen is below the taxable amount and consists of interest income primarily, the individual can submit Form 15H to the bank or post office. This avoids the deduction of tax at source (TDS) on the interest earned, provided the income is within limits of exemption.
Indian senior citizens are entitled to several tax concessions designed to ease their burden. People opting for the old tax regime, in the majority of cases, gain more in terms of higher exemption limits and other deductions. For maximizing these benefits, proper documentation must be maintained, traceable investments and expenses must be recorded, and returns have to be filed on time unless exempted under Section 194P. Financial independence in old age can fairly well be attained by senior citizens by cutting taxable income effectively.
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