Benefits for senior citizen in India under Income Tax Act

Who is a senior citizen under Income Tax Act:

Criteria for senior citizen	Criteria for super/ very senior citizen
Must be of the age of 60 years or above but less than 80 year at any time during the respective year.	Must be of the age of 80 years or above at any time during the respective year.
Must be resident	Must be resident

Please note that the benefit under Income Tax Act is only available to Resident Senior citizen and not to non-resident senior citizen.

Benefit of tax rates to senior and very/ super senior citizen:

Senior citizen

Very senior citizen

A senior citizen is granted a higher exemption limit compared to non-senior citizens. The exemption limit for the financial year 2023-24 available to a resident senior citizen is Rs. 3,00,000. The exemption limit for non-senior citizen is Rs. 2,50,000. Thus, it can be observed that an additional benefit of Rs. 50,000 in the form of higher exemption limit is available to a resident senior citizen as compared to normal tax payers.

A very senior citizen is granted a higher exemption limit compared to others. The exemption limit for the financial year 2023-24 available to a resident very senior citizen is Rs. 5,00,000. The exemption limit for non-senior citizen is Rs. 2,50,000. Thus, it can be observed that an additional benefit of Rs. 2,50,000 in the form of higher exemption limit is available to a resident very senior citizen as compared to normal tax payers.

However, please note that this benefit is not available if the senior citizen opts for new tax regime.

Benefit to senior citizen from payment of advance tax:

As per section 208, every person whose estimated tax liability for the year is Rs. 10,000 or more, shall pay his tax in advance, in the form of “advance tax”. However, section 207 gives relief from payment of advance tax to a resident senior citizen. As per section 207 a resident senior citizen (i.e., an individual of the age of 60 years or above during the relevant financial year) not having any income from business or profession, is not liable to pay advance tax. Please note that this benefit is also not available to non-resident senior citizen.

Is a senior citizen exempts from filing Income Tax Return (ITR)?

Income-tax Act, 1961 provides no exemption to senior citizen or very senior citizen from filing of return of income. However, to provide relief to the senior citizens (whose age is 75 years or more) and to reduce the compliance burden on them, the Finance Act, 2021, has inserted a new section 194P.

This provision requires a banking company to deduct tax under this provision if deductee is maintaining an account with it in which he is receiving his pension income. The tax is required to be deducted under this new provision if the recipient is a resident individual whose age is 75 years or more at any time during the year and the following conditions are fulfilled:

a) Total Income of the deductee consists only income in the nature of pension and interest received or receivable from any account maintained with deductor (such bank); and

b) Deductee has furnished a declaration to deductor containing prescribed particulars.

If the above conditions are satisfied, the deductor shall compute the income of deductee after giving effect to the deduction allowable under Chapter VI-A and rebate under section 87A. Tax on such income is required to be deducted on the basis of rates in force.

If tax is deducted from the income of such senior-citizen, he shall not be liable to furnish the return of income for the previous year in which tax has been deducted.

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