Senior citizens (60 years and above) and super senior citizens (80 years and above) enjoy special tax benefits under the Income Tax Act. These provisions are designed to reduce their tax burden and encourage savings. Here’s a clear breakdown of what’s new for AY 2025–26 and how to maximize benefits.
🧾 1. Higher Basic Exemption Limit
Senior citizens get a higher income tax exemption limit:
60–80 years: ₹3,00,000 (vs ₹2,50,000 for others)
80+ years: ₹5,00,000
This means they pay zero tax if their income is within these limits under the old regime.
💸 2. No Advance Tax for Most Seniors
If a senior citizen does not have income from business or profession, they are exempt from paying advance tax. They can simply pay the entire tax due as self-assessment tax before filing ITR — reducing compliance burden.
🏥 3. Higher Deduction for health Insurance (Sec 80D)
Senior citizens can claim up to ₹50,000 per year for health insurance premiums. If no insurance is available, the same amount can be claimed for actual medical expenses.
💊 4. Deduction for Specified Diseases (Sec 80DDB)
For treatment of specified critical illnesses (like cancer, chronic renal failure, etc.), seniors can claim a deduction of up to ₹1,00,000 — double the limit available to younger taxpayers.
🏦 5. Higher Interest Income Exemption (Sec 80TTB)
Interest from savings accounts, fixed deposits, and recurring deposits is exempt up to ₹50,000 per financial year for senior citizens. This is over and above the basic exemption limit.
📉 6. TDS Relief on Interest (Form 15H)
Senior citizens can submit Form 15H to banks to avoid TDS deduction if their total income is below the taxable limit — ensuring better cash flow throughout the year.
📊 7. Choose the Right Tax Regime
Senior citizens can compare the old tax regime (with deductions) and the new tax regime (lower rates) to choose whichever is beneficial. For many seniors with high deductions (80C, 80D, 80TTB), the old regime may still work better.
✅ Bottom Line: With higher exemptions, additional deductions, and TDS relief, senior citizens can significantly lower their tax outgo in AY 2025–26. A little planning can help them save more and boost retirement savings.
Disclaimer:
The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of any agency, organization, employer, or company. All information provided is for general informational purposes only. While every effort has been made to ensure accuracy, we make no representations or warranties of any kind, express or implied, about the completeness, reliability, or suitability of the information contained herein. Readers are advised to verify facts and seek professional advice where necessary. Any reliance placed on such information is strictly at the reader’s own risk..jpg)
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