The basic salary, fixed allowances, house rent allowance, and other sources of income form the basis for calculating a senior citizen’s income tax. The tax calculating procedure for senior citizens is similar to that for individuals under 60 years.
However, it must be noted that a higher exemption limit under the old tax regime is applicable for senior and super senior citizens as compared to those aged lower than 60 years.
Income tax for pensioners or senior citizens is levied on every source of income. This includes pension, fixed deposits, post office schemes, rental income, interest or earnings from savings schemes, or reverse mortgages. During the tax calculation for senior citizens, gratuity and retirement benefits should be excluded.
For calculating a senior and super citizens’ income tax, the entire income is considered along with the new income tax slab for senior citizens for FY 2023-24 and allowable deductions. An income tax calculator can be a handy tool for determining taxable income. If you want to know your approximate tax liability, provide the following details:
- Assessment year for which a senior citizen/ super senior citizen is willing to calculate income tax
- Residential status, type of taxpayer
- Standard deductions of Rs 50,000 from Salary (available under new tax scheme from A.Y. 2024-25. This was not available under new tax scheme in A.Y. 2023-24)
- Education cess @ 4%, according to the income tax slab applicable for senior citizens
- Surcharge (if applicable)
- Total tax liability
- Due date of submission of income tax return (ITR)
- Income from salary
- Income from house property (if applicable)
- Income and capital gains from other sources
- Gains or profit from any profession or business
- Agricultural income (if applicable)
- Completion of assessment for income tax return
- TCS or TDS (if applicable)