Tax FAQs For Senior Citizens

Tax-related FAQs for senior citizens

1. What is the difference between a senior citizen and a super senior citizen?

   As per income tax rules, a senior citizen is one who is aged between 60 and 80 years. On the other hand, a super senior citizen is one who is aged 80 years and above.

2. What are the tax slabs for senior and super senior citizens?

   Under the old tax regime of the act, there are different tax slab for senior and super senior citizens. However, under the new tax regime, there is a uniform tax slab irrespective of the age group. The tax slabs will be as follows –

   Under the Old Tax Regime, for senior citizens

   Taxable income
   Up to Rs.3,00,000	Nil
   Rs.3,00,000 to Rs.5,00,000	5%(tax rebate u/s 87A is available)
   Rs.5,00,000 to Rs.10,00,000	20%
   Rs.10,00,000 and above	30%

   Under the Old Tax Regime, for super senior citizens

   Taxable income	Rate of tax
   Up to Rs.5,00,000	Nil
   Rs.5,00,000 to Rs.10,00,000	20%
   Rs.10,00,000 and above	30%

   Under the New Tax Regime for FY 2022-23:

   The tax slabs are as follows for both senior and super senior citizens are same as follows–

   Taxable income	Rate of tax
   Up to Rs.2,50,000	Nil
   Rs.2,50,000 to Rs.5,00,000	5%
   Rs.5,00,000 to Rs.7,50,000	10%
   Rs.7,50,000 to Rs.10,00,000	15%
   Rs.10,00,000 to Rs.12,50,000	20%
   Rs.12,50,000 to Rs.15,00,000	25%
   Rs.15,00,000 and above	30%

   However, the new tax regime was modified in the Union Budget 2023. The modifications are as follows –

   • The minimum threshold limit for tax has been increased to Rs.3 lakhs from the existing Rs.2.5 lakhs.
   • The limit to claim a rebate on income tax has been increased. Taxable income up to Rs.7 lakhs will attract no tax. Earlier, it was Rs.5 lakhs.
   • The new regime has been made default unless chosen otherwise.
   • The new changes will be effective from the financial year 2023-24.

   The changed slabs per the new regime are as follows –

   Income	Tax rate
   Up to Rs.3,00,000	Nil
   Rs.3,00,000 to Rs.6,00,000	5%
   Rs.6,00,000 to Rs.9,00,000	10%
   Rs.9,00,000 to Rs.12,00,000	15%
   Rs.12,00,001 to Rs.15,00,000	20%
   Rs.15,00,000 and above	30%

   Senior citizens can choose from the old or the new regime depending on which regime is tax efficient.

3. What are the tax-saving insurance cum investment avenues for senior citizens?

   Senior citizens may invest in the different types of life insurance plans available in the market. Some of the plans that they can choose are as follows:

   • Endowment plans

     Endowment plans allow senior citizens to create a secured corpus which is not exposed to the volatility risks of the market. Some plans might also offer bonus or loyalty additions, subject to policy terms & conditions and product features, that can boost the corpus.

   • Money-back plans

     Money-back plans are like endowment plans that help in creating a secured corpus. However, these plans offer liquidity. Senior citizens can get periodic money-back benefits from the plans for their financial needs.

   • Retirement Plans

     Retirement-oriented life insurance policies can help senior citizens plan for their retirement. Senior citizens can choose from two types of retirements plans –

     • Immediate and Deferred Annuity Plans

       Annuity plans are long-term insurance products that provide a steady income stream, making them suitable for senior citizens seeking predictable post-retirement income.

     • Immediate Annuity Plans

       In an immediate annuity plan, the policyholder pays a lump-sum premium and starts receiving regular income almost immediately. These plans are commonly chosen by retirees who want instant and assured income to meet day-to-day expenses.

       Deferred Annuity Plans

       Deferred annuity plans allow the policyholder to invest during the accumulation phase and receive income at a later date. This option is suitable for senior citizens who may not need immediate payouts but want to plan a steady income for future years.

       From a tax perspective, premiums paid towards annuity-based insurance plans may be eligible for deductions under applicable sections of the Income Tax Act, subject to conditions. However, the annuity of income received is generally taxable as per the individual’s income tax slab.

       By choosing the right type of annuity plan—immediate or deferred—senior citizens can balance income needs, long-term financial security, and tax planning

       Add this internal linking within a single insurance cum investment avenue.

4. Are there other reliefs that senior citizens can claim under income tax?

   Yes, there are other tax-related reliefs offered to senior citizens. Some of them are as follows:

   • Senior citizens that do not earn income from business or profession are exempted from paying advance tax under Section 207.
   • TDS
   • Add this internal linkingis not deducted from deposit income earned by senior citizens provided the interest income is up to Rs. 50,000 u/s 80TTB.
   • No tax is deducted from the payment of interest by the bank for senior citizen up to Rs. 50,000 u/s 194A.

5. What are the rules for senior citizens filling an income tax return?

   Senior citizens must file an ITR if their taxable income exceeds the applicable basic exemption limit. However, resident senior citizens aged 75 years or above are exempt from filing an ITR under Section 194P, only if all of the following conditions are met:

   • Their income consists only of pension and interest income
   • Both pension and interest income are received from the same specified bank
   • They have submitted a declaration to the bank in the prescribed format
   • The bank has calculated the total income, applied eligible deductions and rebates, and deducted the applicable tax
   • They do not have any other source of income

   If any one of these conditions is not satisfied, the senior citizen will be required to file an income tax return as per normal rules.

6. Do senior citizens have to pay capital gains tax in India?

   Yes. Senior citizens are liable to pay capital gains tax in India, as there is no general age-based exemption under the Income Tax Act.

   For long-term capital gains covered under Section 112A—such as gains from listed equity shares and equity-oriented mutual funds—profits exceeding ₹1 lakh are taxed at 10%. The higher basic exemption limit available to senior citizens does not automatically eliminate this tax.

7. Is ₹7 lakh of income tax-free for senior citizens?

   This depends on the tax regime chosen, under the new tax regime from FY 2025-26, resident individuals (including senior citizens) with taxable income up to ₹12 lakh are eligible for a rebate under Section 87A, reducing their tax liability to zero while under the old tax regime, the rebate limit remains ₹5 lakh. Considering this, ₹7 is not tax-free if the individual has opted for the old tax regime. Whereas, as per the new tax regime, it will become a non-taxable amount.

 

Conclusion

So, if you are a senior citizen or if you want to help your parents or other senior citizens with tax planning, understand the income tax provisions for senior citizens. Know the tax slabs and tax-saving options available to senior citizens.