Understanding Senior Citizen Slab Rate FY 19 - 20 (AY 20-21)

Union Budget 2021 Update

No changes in income tax slabs or rates have been proposed. Also, no changes in additional tax exemptions or deductions been introduced. Standard Deduction for the salaried and pensioners also remains same as before. With no change in the Income tax slabs and rates and basic exemption limit. An individual tax payer will continue to pay the tax at the same rates applicable in FY 2020-21.

Finance Minister Nirmala Sitharaman announced no filing of Income Tax Return by senior citizens (above 75 years of age) who have only pension and interest income.

As per the recent report from the United Nations population division, the total number of senior citizens with 60 years and above age is apparently going to reach 19% of India's total population by 2050. If the prediction is correct, then the total number of senior citizens in India will be 323 million.

Keeping the liabilities in mind, the exemption limit on Taxes for this category of people has been revised since AY 2015-16. Moreover, the taxation benefits for senior as well as super senior citizens are also higher than that of the individuals belonging to other age groups.

Now the question is – how does senior citizen tax slab work? And, what are the aspects of super senior citizen tax slab? This post is meant to give you a fair idea regarding the same.

Who are Senior Citizens in India?

As per the law, a senior citizen is that individual who is a resident of India and is between 60 to 80 years of age group as on the last day of the previous FY.

Who are Super Senior Citizens in India?

A super senior citizen is that individual who is the resident of India and is above 80 years of age as on the last day of the previous FY.

Income Tax Slab for Senior Citizens FY 2021-22

The slab rates for senior citizens are calculated based upon their house rent, salary, and fixed allowances along with additional income sources. Now, assuming that the majority of senior citizens don't have a steady income source, they will be eligible for a higher exemption limit than individuals below 60 years of age.

This exemption limit can go up to Rs. 3 lakhs for people with 60 years age and above.

There is an extra education and health cess of 4% on the applicable tax slab. Also, for those who have an income of more than Rs. 50 lakhs, an extra surcharge on the applicable Tax Rate is imposed-

• If the total income is between Rs. 50 lakhs and 1 crore, the surcharge will be 10% of the tax.

• If the total income is more than Rs. 1 crore, the surcharge will be 15% of the tax.

Super Senior Citizen Income Tax Slab FY 2021-22

Quite similar to liabilities on senior citizens, the taxes for individuals who are above 80 years of age is also calculated based on their income generated from different sources, like interest on savings, pension, Post Office schemes, fixed deposits, and more.

Again, additional education and health cess of 4% is applied as per the tax slab. And, an extra surcharge is applicable, similar to what is applied for senior citizens.

Income Tax Exemption for Senior Citizens and Super Senior Citizens

Recent Union Budget of 2019 has announced that the senior and super senior citizens can now claim tax exemptions under section 87A of the ITA. However, there are certain conditions that the people would have to meet, such as:

• Must be a resident of India
• The total income after deduction should not be more than Rs. 5 Lakh.
• The total amount for the tax exemption is not more than Rs. 12,500.

Conclusion

Along with the variety of income tax benefits, the government is also taking the amazing initiative to reduce the tax burden on senior as well as super senior citizens of India. So, before you proceed with paying the income tax, make sure that you are completely aware of the income tax slab for senior citizens and super senior citizens, exemption, and the benefits that are applicable as per your finances and the age group.