An individual resident who is 60 years or above in age but less than 80 years at any time during the previous year is considered a Senior Citizen for Income Tax purposes. A Super Senior Citizen is an individual resident who is 80 years or above, at any time during the previous year.
Applicable Tax Regime Options for Senior Citizens
From FY 2024-25 onwards, the new tax regime is the default tax regime, though individuals still have the option to opt for the old tax regime while filing their Income Tax Return (ITR).
New Tax Regime (Default)
- Basic exemption limit: Rs 3,00,000
- Standard deduction on pension: Rs 75,000 (for senior citizens)
- Rebate under Section 87A: Available up to Rs 7 lakh (net taxable income)
- Tax slabs: 5%, 10%, 15%, 20%, 30% (with increased income bands)
Old Tax Regime
- Basic exemption limit for senior citizens (age 60-80): Rs 3,00,000
- Standard deduction on pension: Rs 50,000
- Deduction under Section 80TTB: Rs 50,000 on interest income
- Tax slabs: 5%, 20%, 30%
TDS on FD Interest and Form 15H
- Banks are required to deduct TDS @10% if FD interest exceeds Rs 50,000 for senior citizens in a year.
- Form 15H can be submitted to avoid TDS only if the total taxable income is below the basic exemption limit or below Rs 7 lakh under the new regime (after rebate u/s 87A).
Filing ITR and Tax Compliance
- The senior citizen must file an Income Tax Return for AY 2026-27 (FY 2025-26) using ITR-1 (if no business income).
- They must report:
- Full pension income
- FD interest income
- Claim eligible deductions (standard deduction, Section 80TTB)
- They may also need to pay self-assessment tax in case the TDS deducted is lower than the total tax liability.
Income Tax Liability Under New Regime
For Example:
| Particulars | Amount (Rs ) |
| Pension Income | Rs 7,00,000 |
| FD Interest Income | Rs 13,00,000 |
| Total Gross Income | Rs 20,00,000 |
Calculation:
| Particulars | Amount |
| Pension Income | Rs 7,00,000 |
| Less: Standard Deduction (Pension) | Rs 75,000 |
| Net Pension Taxable | Rs 6,25,000 |
| FD Interest Income | Rs 13,00,000 |
| Less: Deduction under Section 80TTB | Rs 50,000 |
| Net FD Taxable | Rs 12,50,000 |
| Total Taxable Income | Rs 18,75,000 |
Tax Payable:
| Slab | Rate | Tax Amount |
| Up to Rs 3,00,000 | NIL | Rs 0 |
| Rs 3,00,001 - Rs 6,00,000 | 5% | Rs 15,000 |
| Rs 6,00,001 - Rs 9,00,000 | 10% | Rs 30,000 |
| Rs 9,00,001 - Rs 12,00,000 | 15% | Rs 45,000 |
| Rs 12,00,001 - Rs 15,00,000 | 20% | Rs 60,000 |
| Rs 15,00,001 - Rs 18,75,000 | 30% | Rs 1,12,500 |
| Total Tax | Rs 2,62,500 | |
| Add: Health and Education Cess @4% | Rs 10,500 | |
| Total Tax Liability | Rs 2,73,000 |
Tax Liability under Old Regime:
| Particulars | Amount (Rs ) |
| Standard Deduction on Pension Income | Rs 50,000 |
| Deduction u/s 80TTB (FD Interest for Sr. Citizens) | Rs 50,000 |
| Total Deductions | Rs 1,00,000 |
| Net Taxable Income | Rs 19,00,000 |
Tax Payable:
| Income Slab | Tax Rate | Taxable Amount (Rs ) | Tax (Rs ) |
| Up to Rs 3,00,000 (senior citizen limit) | Nil | Rs 3,00,000 | Rs 0 |
| Rs 3,00,001 - Rs 5,00,000 | 5% | Rs 2,00,000 | Rs 10,000 |
| Rs 5,00,001 - Rs 10,00,000 | 20% | Rs 5,00,000 | Rs 1,00,000 |
| Rs 10,00,001 - Rs 19,00,000 | 30% | Rs 9,00,000 | Rs 2,70,000 |
| Total Tax Before Cess | - | - | Rs 3,80,000 |
| Add: Health & Education Cess @4% | - | - | Rs 15,200 |
| Total Tax Payable | - | - | Rs 3,95,200 |
Note:
Rebate under Section 87A is not available because taxable income exceeds Rs 5 lakh.
TDS @10% will be deducted on FD interest over Rs 50,000 by the bank.
Senior citizens (non-business) are exempt from advance tax if all income is from pension and interest.
Tax Benefits Comparison
| Criteria | Senior Citizen (60-<80 yrs) | Super Senior Citizen (80+ yrs) |
| Basic Exemption Limit (Old Regime) | Rs 3,00,000 | Rs 5,00,000 |
| Standard Deduction on Pension | Rs 50,000 | Rs 50,000 |
| Eligible for Section 80TTB | Rs 50,000 | Rs 50,000 |
| e-Filing ITR | Mandatory if income > exemption | Mandatory if income > exemption |
| Advance Tax | Exempt if no business income | Exempt if no business income |
Final Takeaways
- FD interest deduction under Section 80TTB helps reduce taxable income.
- Form 15H won't apply since taxable income > Rs 12 lakh.
- Plan tax by computing estimated liability, declaring full interest, and filing ITR.
- FD interest TDS is inevitable due to high interest; claim back in ITR.
FAQs
Who qualifies as a senior citizen under income tax law?
A person who is 60 years or older but below 80 years as of 31st March of the financial year is considered a senior citizen.
What is the basic exemption limit for senior citizens in FY 2025-26?
- Under the Old Tax Regime: Rs 3,00,000
- Under the New Tax Regime: Rs 3,00,000 (but higher slabs and rebate available up to Rs 7 lakh)
What is the standard deduction available to senior citizens on pension income?
- Rs 50,000 under the Old Regime
- Rs 75,000 under the New Regime (from FY 2024-25 onwards)
Is FD interest taxable for senior citizens?
Yes, FD interest is fully taxable. However, senior citizens can claim a deduction of up to Rs 50,000 on interest income under Section 80TTB (only in the old regime).
Will a senior citizen with Rs 20 lakh income have to pay tax?
Yes. Whether under the old or new tax regime, Rs 20 lakh income (from pension + FD) exceeds the exemption limits. Tax will be payable after applicable deductions.
Can senior citizens submit Form 15H to avoid TDS on FD interest?
Only if total taxable income is below the basic exemption limit or qualifies for Section 87A rebate (net income up to Rs 7 lakh in new regime). With Rs 20 lakh income, Form 15H cannot be submitted.
Will banks deduct TDS on FD interest for senior citizens?
Yes. If FD interest exceeds Rs 50,000 in a financial year, TDS @10% is applicable under Section 194A.
Is paying advance tax exempt for Senior Citizen?
Yes, they are exempt from advance tax, even if total income exceeds Rs 10 lakh. They can pay self-assessment tax before filing their ITR.
Is it mandatory for senior citizens to file an ITR ?
Yes. If total income exceeds the basic exemption limit, the senior citizen must file their Income Tax Return (ITR-1 or ITR-2 depending on income sources).
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