In India, the income tax system operates on a progressive basis, which means that those with higher incomes are required to pay a higher percentage of their earnings as taxes.
Senior citizens and super senior citizens, who are retired, are eligible for certain exemptions under this system. Senior citizens are individuals aged 60 years or above but below 80 years, while super senior citizens are those aged 80 years or above. These exemptions have been designed to provide relief to these groups, considering their lower earning capacity and higher medical expenses.
For the financial year 2023-24, tax benefits for both senior citizens and super senior citizens are quite similar, except for the basic exemption limit.
The basic exemption limit for senior citizens is Rs. 3,00,000, which means that they will not have to pay any income tax if their income is Rs. 3,00,000 or less. In contrast, the basic exemption limit for super senior citizens is higher at Rs. 5,00,000. This higher limit is to ensure that super senior citizens have a higher disposable income to meet their medical and other expenses.
However, both groups are subject to a basic exemption limit of Rs. 2,50,000 under the New Tax Regime.
The tax slabs for senior citizens are as follows:
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Those earning up to Rs. 3,00,000 are exempt from tax
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Those earning between Rs. 3,00,001 and Rs. 5,00,000 are taxed at 5%
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Those earning between Rs. 5,00,001 and Rs. 10,00,000 are taxed at 20% plus Rs. 10,000
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Those earning above Rs. 10,00,000 are taxed at 30% plus Rs. 1,10,000
The tax slabs for super senior citizens are different:
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Those earning up to Rs. 5,00,000 are exempt from tax
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Those earning between Rs. 5,00,001 and Rs. 10,00,000 are taxed at 20%
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Those earning above Rs. 10,00,000 are taxed at 30% plus Rs. 1,00,000
Deductions:
Both senior citizens and super senior citizens can claim deductions under Section 80D for medical insurance premiums of up to Rs. 1 lakh. They can also deduct Rs. 50,000 for interest income from savings accounts and deposits under Section 80TTB.
Tax Rebate:
Senior citizens who earn less than Rs. 5,00,000 are eligible for a tax rebate of Rs. 12.50, while super senior citizens who earn less than Rs. 5,00,000 are eligible for a tax rebate of Rs. 50,000.
