Income Tax Slab for Senior Citizens & Super Senior Citizens: Deductions & Exemptions Explained

Everything about the Income Tax Slabs for Senior & Super Senior Citizens

As per Indian Census 2011, the total number of Indians aged 60 years and above is 10.38 crore in the country, which is projected to be 17.32 crore for 2026. Going by this data, the next pressing question that arises is the consequent economic, social and more importantly, healthcare challenges.

Taking such liabilities under consideration, the exemption limit on taxation for senior citizens and super senior citizens have been revised since the assessment year 2015-2016. Further, the income tax benefits for senior and super-senior citizens are also significantly higher than that for individuals below 60 years of age.

But who are considered senior and super senior citizens in India? Let us take a look.

Who is Considered a Senior Citizen in India?

According to Income tax, a senior citizen is a resident individual who is 60 years or more at any time of the financial year, but less than 80 years. 

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Who is Considered a Super Senior Citizen in India?

A super senior citizen is an individual resident who is  80 years or above of age, at any time during the financial year.

Taxpayers 60 years or more of age who need to file returns till 31 July, 2023, for the previous financial year 2022-23 must go through the following income tax slabs. These slabs are applicable only before Budget 2023.

After the Union Budget 2023 revised the income tax slabs under the new regime for FY 2023-24, the basic exemption limits for senior citizens became the same for both tax regimes, which is ₹3 lakhs. In FY 2022-23, the basic exemption limit for the new tax regime was ₹2.5 lakhs.

The basic exemption limits are different for super senior citizens in both tax regimes. The Union Budget 2023 proposed a basic income exemption limit of ₹3 lakhs under the new regime, which was ₹2.5 lakhs for FY 2022-23.   

While under the old tax regime, they can claim a basic income exemption of up to ₹5 lakhs for both financial years.

In case senior citizens and super senior citizens opt for the new tax regime for FY 2023-24, they would have to forego certain income tax benefits, which are as follows:

• House Rent Allowance (HRA)
• Leave Travel Allowance (LTA)
• Professional tax
• Special Allowances by the employer, including conveyance allowance, relocation allowance, daily expenses during their course of employment
• Interest on housing loan under Section 24 
• Children Education Allowance 
• Helper Allowance
• Deduction under Chapter VI-A, such as 80C, 80D, 80E, 80TTB, etc. Apart from the deduction under Notified Pension Scheme and 80JJAA.
  
  Know more about:- HRA Calculator

One of the vital areas where you can particularly benefit from these exemptions is healthcare. Owing to the rising cost of healthcare in the country, the government has offered tax benefits on health insurance policies that can reduce the financial liability of seeking treatment to quite an extent.   

Following are some common tax deductions and benefits individuals aged 60 and above can avail of for financial years 2022-23 and 2023-24.  

• Standard Deduction  

Pensioners above 60 years can claim a standard deduction of ₹50,000 under the head 'Income from salaries’ on their pension only. Family pensioners can also claim a standard deduction of up to ₹15,000.

• Deduction Under Section 80DDB

Senior citizens can claim a deduction of up to ₹ 1 lakh for the medical expenditure of specific critical illnesses, as per the amendments made by the Union Budget 2018-19.

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• Health Insurance

Under Section 80D of the Income Tax Act, senior citizens can claim a deduction of up to ₹ 50,000 for medical insurance premiums, which is ₹ 25,000 for other individuals.

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• Interest From Savings

Under Section 80TTB, the deduction on interest income generated from deposits with savings bank accounts, bank deposits, post office deposits or cooperative banks post office and bank has been expanded from ₹ 10,000 for people below 60 years of age to ₹ 50,000 for senior citizens. This benefit also applies to interest income from various fixed and recurring deposit schemes.

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• Reverse Mortgage Scheme  

Under this scheme, the regular instalments senior citizens receive upon mortgaging their home for life while the ownership and possession remain with them are entirely exempt from income tax.