Overview
This article covers the applicable tax regime comparison, Rebate u/s 87A, advance tax exemption, no tax using new sections and forms introduced recently under Income Tax Act 2025.
Who are called Senior Citizens?
Senior citizens are individuals who are aged 60 years or more but below 80 years during the financial year. Those who are aged 80 years and above are called super senior citizens.
Income Tax Slabs for Senior Citizens FY 2026-27
Senior citizens can choose between the Old Tax Regime and the New Tax Regime based on which is more beneficial.
Under Old Tax Regime
| For Senior Citizens | For Super Senior Citizens |
|
|
Under New Tax Regime
For both senior citizens and super senior citizens:
- Income up to Rs 4,00,000 lakh is exempt from tax.
- Rs.4 Lakh to Rs.8 Lakh: 5%
- Rs.8 Lakh to Rs.12 Lakh: 10%
- Rs.12 Lakh to Rs.16 Lakh: 15%
- Rs.16 Lakh to Rs.20 Lakh: 20%
- Rs.20 Lakh to Rs.24 Lakh: 25%
- Above Rs.24 Lakh: 30%
If you have received any retirement benefits during the financial year, this complete guide "Income Tax on Retirement Benefits" may help you to report and claim eligible exemptions accurately.
Benefits on Saving or FD interest income
Senior citizens can claim a deduction under Section 80TTB up to Rs 50,000 on interest income earned from savings accounts, fixed deposits, and post office deposits. This benefit is only available under the old tax regime.
Under Budget 2025, the bank-level TDS limit on interest income for senior citizens has been increased to Rs.1,00,000 which means no tax will be deducted unless interest exceeds Rs.1 lakh.
Are you looking for higher FD interest income then click here to know which PSU bank is offering the highest returns on 444-day special fixed deposits.
TDS for FD Interest Income
If interest earned from Fixed Deposit is up to Rs.1,00,000 in the financial year then no TDS is deducted u/s 393(1)[Sl.5(ii).D(a)]. If FD interest income is above Rs.1,00,000 than TDS @ 10% will be applicable.
Code for depositing TDS for FD Interest is 1020.
TDS Exemption if the amount is above Rs.1,00,000
- Senior and super senior citizens can avoid TDS on interest income by submitting Form 121 which is a declaration under Section 393(7) of the Income Tax Act.
- It is applicable if interest income is above Rs.1,00,000 but total income is still below the taxable threshold.
Also Read - How To Earn Rs 16,650 per Month Through Post Office Monthly Income Scheme 2026
Medical Insurance Under Section 80D
- Deductions can claim up to Rs.1,00,000 for health insurance premiums if both taxpayer and parents are senior citizens.
Conditions for claiming deductions if the you don't have any health insurance policy:
- If you have kept all the medical bills or expenditure safely which paid through credit/debit card, UPI, bank transfers, etc then as a taxpayer you can still claim deductions up to Rs 50,000 for medical expenses even if they do not have a health insurance policy.
Deduction Under Section 80DDB
Section 80DDB provides a deduction of up to Rs.40,000 for individuals and Rs.1,00,000 for senior and super senior citizens for expenses incurred on the medical treatment of specified diseases.
Deductions Under Section 80C
Senior citizens can claim a deduction of up to Rs.1.5 lakh under Section 80C under old tax regime to reduce their taxable income for eligible investments such as PPF, tax-saving fixed deposits, life insurance premiums, Sukanya Samriddhi Yojana and certain pension schemes.
Tax Rebate under Section 87A
For FY 2026-27, rebate up to Rs.12,500 for total income up to Rs.5 lakh is available under the old tax regime. Under the new tax regime, a tax rebate of Rs.60,000 is applicable for income up to ₹12 lakhs.
Health and Education Cess
After calculating income tax, 4% Health and Education Cess is an additional tax added to the total income under both old and new tax regimes.
Surcharge Rates
An additional surcharge applies to high-income taxpayers based on total income:
| Income Limit | Under New Tax Regime | Under Old Tax Regime |
| Rs.50 lakh – Rs.1 crore | 10% | 10% |
| Rs.1 crore – ₹Rs.2 crore | 15% | 15% |
| Rs.2 crore – Rs.5 crore | 25% | 25% |
| Above Rs.5 crore | 25% | 37% |
No Advance Tax Liability
Senior citizens are exempted from paying advance tax for a given financial year if they do not have business income. They are only required to pay Self-Assessment Tax after calculating final tax liability.
Explore More: Advance Tax Due Dates For FY 2026-27
ITR Exemption For Senior Citizens Above 75 Year Under New IT Act 2025
Section 393(1) [Table:Sl. No. 8(iii)] under income tax act 2025, exempts senior citizens from filing income tax returns if they meet these conditions:
- Age 75 years or above.
- Resident in India.
- Receive pension and interest income only from the same specified bank.
- Submit a declaration in Form No. 125 to the specified bank.
The specified bank deducts TDS considering deductions and rebates, and seniors need not file ITR after this TDS deduction.
If there is any tax liability - then know how to calculate and pay your Self-Assessment Tax?
FAQs
Which tax regime is better for senior citizens?
It depends:
- Old regime is better if you claim deductions (80C, 80D, 80TTB, etc.)
- New regime is better if your income is up to Rs.12 lakh with minimal deductions
Is TDS applicable on interest income for senior citizens?
TDS is deducted only if interest income exceeds Rs.1,00,000 in a financial year.
Are senior citizens required to pay advance tax?
No, senior citizens without business income are exempt from paying advance tax.
Which ITR form should senior citizens use?
ITR-1: Pension, salary, interest income
ITR-2: Capital gains or multiple income sources
CAclubindia
