Under new tax regime for FY 2024-25, senior citizens filing their ITR can access several benefits and deductions. This guide outlines the tax-free incomes, deductions, exemptions, and filing requirements applicable for Assessment Year 2025-26.
Rebate u/s 87A
Senior citizens can claim a maximum tax rebate of Rs 25,000 u/s 87A.
Generally, basic exemption is Rs 3 Lakh but this rebate applies even if the total income is Rs 7 lakh or less, which is a general rule for all individuals, including senior and super senior citizens.
Standard Deduction
A standard deduction of up to Rs 75,000 is available for income from part-time salary or pension.
For family pension, deduction is available under Section 57(IIA), which is the lower of 1/3 of the pension or Rs 25,000.
Both the standard deduction and the family pension standard deduction can be claimed together, as their income sources and nature are different.
Click Here To Know Family Pension Taxation: How Much You Can Save?
Share Market Income
Long-Term Capital Gain
For LTCG from shares, the first Rs 1,25,000 is tax-free.
The remaining LTCG amount is taxed at 12.5% if it occurs after 23 July 2024.
If the gain occurred before 23 July 2024, it is taxed at 10%.
Short-Term Capital Gain
STCG is fully taxable, with no basic exemption limit benefit, and is taxed at 20%.
Loss Carry Forward
Long-term or short-term losses from share market or other sources can be carry forward up to 8 assessment year to set off against future income and save tax.
To carry forward losses, it is mandatory to file your ITR before the due date u/s 139(1), which is 15 September 2025, for FY 2024-25.
Specified Senior Citizens
Under Section 194P, specified senior citizens are not required to file their ITR if certain conditions are met:
- Individuals aged 75 years or more
- Resident of India
- Pension + Interest Income
- Submit a declaration to the specified bank
The bank is a 'specified bank' as notified by the Central Government will be responsible for the TDS deduction of senior citizens after considering the deductions under Chapter VI-A and rebate under 87A.
Once the specified bank, deducts tax for senior citizens above 75 years of age, there will be no requirement to furnish income tax returns by senior citizens.
Click Here To Know Who Can Legally Skip ITR Filing?
Advance Tax
Senior citizens are generally exempted from paying advance tax and they do not incur interest on late payments, provided that they do not have any income from business. If there is business income, advance tax liability will be applicable.
Tax-Free Capital Gain
- Gains on the sale of rural land are fully tax-free.
- Compulsory acquisition of land bythe Government.
Property Related Exemptions
If a senior citizen gained from selling any residential property, they can claim tax exemption u/s 54.
For long-term capital gains from selling any other type of land, exemption can be claimed u/s 54B.
If the capital gain is a long-term capital gain from selling any capital asset, exemption can be claimed u/s 54F.
Tax can be saved on long-term capital gains by investing up to a maximum of Rs.50 lakh in government bonds u/s 54EC, even within the new tax regime.
Housing Loan
Interest on housing loans can be claimed under the new tax regime only if the house is let out. If house is self occupied, no deduction is allowed for interest under the new tax regime.
Income From Intraday Share
Intraday are covered under speculative business transactions.
In case of losses, it can be carried forward for a next of 4 assessment years but can only be offset against speculative gains.
Futures and Options
Futures and Options covered under non-speculative business transactions.
For Futures and Options (F&O) trading losses, filing ITR before the due date is mandatory to carry forward losses up to 8 assessment years.
Click Here To Know Taxation for Futures & Options Traders FY 2024-25
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