A couple of months earlier, the Income Tax Department launched a helpful pamphlet detailing the appropriate tax arrangements which seniors (over 60 years) and incredibly seniors (over 80 years) ought to learn about.
What are the most recent earnings tax pieces for seniors and extremely seniors for AY 2025-26 and AY 2026-27?
Chartered Accountant Suresh Surana states that for evaluation Years (AY) 2025– 26 and 2026– 27, taxpayers, consisting of seniors, can pick in between the old tax routine and the brand-new tax routine.
While the old program provides greater fundamental exemption limitations and enables numerous reductions and exemptions, the brand-new program provides concessional tax rates however there is a limitation on exemptions and reductions. The earnings tax pieces vary on the basis of the age of the person under the old routine, particularly for elderly people (aged 60 years or more however less than 80 years) and very elderly people (aged 80 years or above). On the other hand, under the brand-new program, the very same piece rates use evenly to all people, no matter age.
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The tax rates for seniors taxpayers under the brand-new tax routine for FY 2024-25 and FY 2025-26 are as follows:
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The tax rates under the old tax program for elderly people for FY 2024-25 (AY 2025-26)and FY 2025-26 (AY 2026-27)are as follows
Take a look at the information listed below to learn what the earnings tax department stated in the sales brochure.
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Who is an elderly person and an incredibly elderly person?
At any time throughout the appropriate fiscal year:
- Specific homeowner who is of the age of 60 years or above however less than 80 years is a Senior Citizen.
- Specific local who is of the age of 80 years or above is a Super Senior Citizen.
Keep In Mind: Senior Citizen in addition to Super Senior Citizen takes pleasure in all the tax advantages offered to non-senior residents in addition to some unique advantages.
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Type No. 15H for non-deduction of tax at source
A Senior/Super Senior person might send statement in Form No. 15H to the deductor for non-deduction of TDS to the impact that tax on his approximated earnings for the pertinent year in NIL. Based upon such confirmed statement, the Deductor will not make any TDS.
Sanjoli Maheshwari, Executive Director, Nangia & & Co LLP, states that according to the recommended arrangement and guidelines thereof, a resident specific aged 60 years or above (i.e., a senior) can provide a self-declaration in Form 15H to the individual accountable for paying particular earnings (consisting of interest on repaired deposits), that the tax on his approximated overall earnings (inclusive of such earnings) will be ‘NIL’ in order to guarantee that no tax is subtracted at source by the stated individual on such earnings.
Maheshwari states that while calculating the tax on approximated overall earnings, advantage of refund under Section 87A (offered to resident people with gross income Rs 12 lakh under the brand-new program from AY 2026-27 onwards) will be thought about.
She states: “Accordingly, if a senior citizen’s total income is Rs 12 lakh under the new tax regime in AY 2026-27, and the tax liability computed after considering the eligible rebate under Section 87A is ‘Nil’, he can submit Form 15H so that no tax is deducted at source on interest on fixed deposits.”
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Greater fundamental exemption for senior and very seniors
For Senior Citizens in AY 2024-25, the fundamental exemption limitation is repaired at a figure of Rs 3 lakh in both New tax routine (default), in addition to, at Rs 3 lakh in Old tax program. For Super Senior Citizens in AY 2024-25, the standard exemption limitation is repaired at Rs 3 lakh in New tax program (default), while, at Rs 5 lakh in Old tax routine.
Typical arrangements of the Income Tax Act apply for non resident seniors. To get Old tax program, both Senior resident/ Super senior need to work out alternative u/s 115 BAC( 6 ). Otherwise, the New tax program will be the default. Keep in mind: For other specific taxpayers, the fundamental exemption limitation upto which she/he is not needed to pay any tax is Rs 3 lakh (for AY 2024-25 and 2025-26 in the New tax routine) and Rs 2.5 lakh (For A.Y. 2024-25 in Old tax program).
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Exemption from payment of advance tax
A resident senior/super elderly person, local of India, need not pay any advance tax, offered he does not have any earnings under the head “Profits and Gains of Business or Profession.
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Keep in mind: Every individual whose approximated tax liability for the year is Rs. 10,000/-or more, is accountable to pay advance tax.
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Advantages of basic reduction
Senior and incredibly elderly people who have invoice of pension earnings from their previous companies can declare the following reduction:
- As much as Rs 75,000 versus such earnings under the New tax routine (AY 2025-26 onwards), increased from existing Rs 50,000/-(AY 2024-25).
- approximately Rs 50,000 versus such earnings under the old tax routine.
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If pension is less than Rs 75,000 (brand-new tax routine) or Rs 50,000 (old tax routine), the reduction will be restricted to the quantity of pension got.
Greater Deduction for Medical insurance coverage premium/ medical expenditure-section 80D
- This is readily available just under the Old tax routine.
- From AY 2020-21 onwards, the optimum limitation for reduction under Section 80D in regard of payment produced medical insurance premium in regard of a Senior/Super Senior person has actually been enabled at Rs 50,000.
- And a reduction is enabled as much as Rs 50,000 for medical expenditures sustained on the health of a senior/super senior supplied no quantity is spent for medical insurance of such individual.
- Both reductions can likewise be declared by taxpayer who is an elderly person and likewise has senior/super elderly person moms and dads. For e.g. If the taxpayer pays medical premium for self and sustains medical costs for moms and dads, or vice versa.
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It needs to be kept in mind that:
- For declaring this reduction, it is necessary that the medical insurance premium/ medical expenditures are paid by any mode aside from money.
- For other people, the optimum limitation of reduction under Section 80D is Rs 25,000.
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Reduction in regard of upkeep and medical treatment of a reliant with disability-Section 80DD
- A reduction from Rs 75,000 to Rs 1,25,000, relying on intensity of impairment, is enabled u/s 80DD of Old tax plan to a resident Individual or HUF for medical expense sustained straight on a reliant with special needs, or, through a deposit in an alerted plan suggested for upkeep and medical treatment of such reliant with special needs for their life time.
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Greater Deduction in regard of costs sustained for Medical Treatment of a defined illness or ailment-Section 80DDB
Under the Old tax routine, a Senior/Super Senior taxpayer can obtain reduction upto Rs 100000 in regard of selfmedical treatment for defined illness or conditions.
Under the Old tax routine, an Individual or HUF taxpayer can get reduction upto Rs. 100000 in regard of treatment of Senior/Super Senior person for defined illness or disorders, offered such Senior/Super Senior person depends on Individual or a member of HUF.
Keep in mind: For non-senior Individual taxpayers and HUF, the quantity of reduction readily available in regard of expenditures sustained for medical treatment of self or non-senior person dependent/member for defined illness or disorders u/s 80DDB is Rs 40,000 under the Old tax program.
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Greater Deduction for Interest Income from Bank and Post Office
A Senior/Super Senior resident can declare reduction upto Rs. 50,000 u/s 80TTB, under Old tax program, in regard of interest earnings made on cost savings bank accounts, bank deposits or any deposit with post workplace or cooperative banks.
In case such interest earnings made by him throughout the year is less than Rs 50,000, the payer bank/ post workplace will not subtract any tax from such interest earnings.
Keep in mind: Individual taxpayers besides elderly people are enabled optimum reduction of Rs 10,000 u/s 80TTA in regard of interest earnings from conserving checking account. Please note that if the deposit is held for/by/on behalf of any firm/AOP/BOI, the member/partner can not obtain this advantage, even if elderly person.
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Eligibility to submit Manual Income Tax Return
An incredibly senior aged 80 years or above submitting his Return of Income in Form SAHAJ (ITR-1) or SUGAM (ITR-4) and having overall earnings of more than Rs. 5 lakh or having a refund claim, can submit his/her Return of Income in paper mode. For such people, electronic filing of ITR – 1 or ITR-4 (as the case might be) is not compulsory.
Keep in mind: The Super Senior Citizen might choose e-filing, if he selects to do so.
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Earnings tax exemption on Transfer of Capital possession under ‘Reverse Mortgage Scheme’
The transfer of a property home by method of reverse home loan based on the Reverse Mortgage Scheme made and alerted by the Central Government for Senior/Super Senior resident, is not accountable to be taxed as Capital Gain (even the loan quantity gotten is not taxable under any other head of earnings).
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Exemption from filing ITR
The following classification of Senior Citizens are not needed to submit their ITR:-
- Citizen Senior Citizens-75 years or more, and
- Having just pension earnings and interest earnings just from the account(s) preserved with a bank in which they get such pension.
Keep in mind:
- Appropriate from A. Y. 2021-22,
- The defined bank will be accountable for calculating their overall earnings and subtracting tax thereon after offering result to different reductions allowed under Chapter VI-A and refund under Section 87A of the Income Tax Act, 1961.
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- Information of ITRs to be submitted by Senior Citizens: ITR-1(Sahaj)-For Senior residents whose earnings consists of salary/pension, interest from cost savings accounts/fixed deposits, and rental earnings from a single house. Overall earnings reported need to not go beyond Rs 50 Lakhs.
- ITR-2- For Senior residents whose earnings likewise consists of capital gains from sale of shares, home, or other possessions,
- ITR-3 or ITR4(Sugam)- For Senior residents whose earnings consists of incomes from any company or occupation.
