Pension Income Up To Rs.13 Lakh: No Tax under New Tax Regime

Pension income is generally considered as salary income and it is taxable under the head Income from Salary. However, the tax liability depends on the taxpayer's age, total income, deductions and the selected tax regime (New or Old).

Under the new tax regime, 

• Eligible pensioners can claim a standard deduction of ₹75,000. 
• With the applicable Section 87A rebate up to ₹60,000.
• If you have pension + saving + FD interest + rental income after deducting 30% and the total income becomes below ₹12.75 lakh, then you may have zero tax liability on taxable income. 

When ITR filing becomes mandatory?

If income is above ₹4 lakh, ITR filling becomes mandatory.

Mandatory ITR Filing Conditions

• If aggregate deposits in one or more current account exceeds ₹1 Crore during the financial year.
• If aggregate deposits reach or exceeds ₹50 Lakh in one or more saving account during the financial year.
• Expenditure on foreign travel exceeds ₹2 Lakh in a one year.
• Electricity bill above ₹1 Lakh during the financial year.
• TDS or TCS is ₹25,000 or more or ₹50,000 or more if you are a resident individual aged 60 years or above.
• Turnover or gross receipt from business above ₹60 Lakh.
• Gross receipt from profession exceeding ₹10 Lakh.

New Tax Regime Slab Rates

Explore in Details - Pensioner ITR For AY 2026-27: Who Qualifies For Exemption?

Which ITR Form Should Pensioners File?

• ITR-1: Pension or salary, interest and eligible house-property income.
• ITR-2: Capital gains income.
• ITR-3: Intraday trading and F&O income.
• ITR-4: Eligible business or professional income under presumptive taxation.

Also Read - Reporting Pension Income and Claiming Your Tax Refund

For Example

Due Date To File ITR For Pensioner

For Example - No Tax Up To ₹13,05,000

If you are a retired person and receiving income from multiple sources such as yearly pension ₹11,30,000, rental income  ₹1,00,000 and Savings + interest ₹75,000, all taxable income must be considered while calculating the total tax liability.

Here, since the taxable income become ₹12,00,000 - no tax will be payable.

Penalties for Late Filling of ITR

• If total taxable income is up to ₹5 Lakh - ₹1,000
• If total taxable income is above ₹5 Lakh - ₹5,000

Interest on Unpaid Tax

• 1% per month or part of a month is levied on the tax liability remaining unpaid after the due date.

Loss of Benefit

• If you are filling ITR after the original due date, then you cannot opt for the old tax regime and you lose the right to carry forward most business or capital losses.

Also Check - Income Tax SMS Alert For Salaried and Pensioner FY 2026-27

Advance Tax Rules

If your estimated tax liability for the financial year is above ₹10,000 after adjusting TDS and other eligible credits, then you are required to pay advance tax in instalments.

Exception for Senior Citizens: Resident individuals with aged 60 years or above are not required to pay advance tax if they do not have any income from business or profession.

Regular Pension vs Family Pension

Regular pension is taxable under the head 'Income from Salary', whereas family pension is taxable under 'Income from Other Sources'. 

Eligible family pensioners can claim a deduction of ₹25,000 or one-third of the family pension, whichever is lower, under the new tax regime.

Check Out The Deductions Available in New Tax Regime