Like all taxpayers, senior citizens must also pay income tax on their income. However, seniors are offered additional tax benefits to help them make the most of their income and investments.

After Budget 2020, individual taxpayers, including seniors, with no business income can choose between the old tax regime and the new concessional regime. Here are three things you should know about the income tax slabs for senior citizens.

1. Old & New Tax Slabs for Seniors

Senior and super senior citizens can now choose between the old and new tax regimes to reduce their tax liabilities. While the applicable tax rate is lower in the new regime, a taxpayer must forgo almost all the deductions that can be claimed under the older regime.

Here’s the old tax regime for senior citizens.

The new tax regime is as follows-

Health and Education Cess @4% of income tax is applicable on every slab, except the Nil slab with income of up to ₹ 2.5 lakhs.

2. Old & New Tax Slabs for Super Senior Citizens

Here are the tax slabs for super seniors (above 80 years) as per the old regime:

The new tax slabs for super seniors are as follows-

Health and Education Cess @4% of income tax is applicable on every slab, except the Nil slab with income of up to ₹ 2.5 lakhs.

3. Tax Deductions Available for Seniors 

Here are some of the income tax deductions exclusively available for senior citizens.

• Standard deduction of up to ₹ 50,000 in a financial year on pensions received through annuity payments.
• Deduction of up to ₹ 50,000 in a financial year on premiums paid towards a health insurance policy or medical expenses under Section 80D of the Indian Income Tax Act. Dependent senior citizens can also claim a deduction of up to ₹ 1 lakh if suffering from a critical illness under Section 80DDB.
• Deduction of up to ₹ 50,000 on interest income earned from the post office, savings account, fixed or recurring deposit under Section 80TTA.

 Invest Smart to Boost Your Retirement Income 

Products like retirement plans and health insurance are an excellent way for seniors to reduce their tax liabilities, while adding more security and stability to their retirement life. Look for a reputed insurer to know more about the available products and their tax benefits.

You can also consult a tax advisor to know more about the tax slabs and decide whether the old or new tax regime can help you save more.