Senior vs Super Senior citizens: What are the income tax slabs available?

• December 13, 2022
• CA Chandan Agarwal's Office

For income taxation purposes, a resident is deemed to be a senior citizen if they had been 60 or older but under 80, whereas an individual resident who was 80 years of age or older at any point in the previous financial year is referred to as a super senior citizen.

For income tax purposes, a resident is deemed to be a senior citizen if they had been 60 or older but under 80, whereas an individual resident who was 80 years of age or older at any point in the previous financial year is referred to as a super senior citizen. Senior and Super Senior Citizens may choose the Old Tax Regime or the New Tax Regime, i.e., under Tax Slabs for AY 2022-23. There are several exemptions and deductions, such as 80C, 80D, 80TTB, and HRA, that are not available to taxpayers who choose tax concessions rates under the New Tax Regime when compared to the old tax regime. What tax brackets and income tax deductions are available to senior and super senior citizens? Let’s find out from our tax experts.

Expert 1: Nidhi Manchanda, Certified Financial Planner, Head of Training, Research & Development at Fintoo

As per Income Tax Act, elderly taxpayers are classified as Senior citizens and Super Senior citizens.

Senior citizens are defined as an individual who is 60 years of age or above but less than 80 years of age. Anybody who is 80 years old or above is considered to be a super senior citizen as per Income Tax Act. This bifurcation is done to give additional tax benefits for people reaching 80 years.

One should note that under the old tax regime, senior citizens get a basic exemption of 3,00,000 i.e., an income earned up to 3,00,000 is tax free. On the other hand, for super senior citizens, this basic exemption limit is raised to 5,00,000.

You may check the income tax slabs for senior and super senior citizens under old tax regime in the table below: –

It is important to note that a Rebate of Rs. 10,000 u/s 87A is applicable for senior citizens if their total income is not more than 5 lacs. Therefore, effectively senior citizens will not have to pay any tax if their income is up to 5 lacs. However, if the income crosses the mark of 5 lacs, then they will have to pay tax on the entire income exceeding 3 lacs.

If opting for the new tax regime, no additional exemption is available for senior and super senior citizens. Under the new tax regime, there is only one category of slabs which is applicable for all individuals with no categorization of senior or super senior citizens. Here, the basic exemption limit is lower at 2.5 lacs.

Opting for a new tax regime means lower tax rates but with a disadvantage of not being able to claim most of the deductions and exemptions like 80C, 80D, HRA, 80TTB etc.

In the following table, you will find the income tax slabs for senior and super senior citizens under the new tax regime: –

Individuals should note that rebate of up to 12,500 u/s 87A is available in the new tax regime if the income is not more than 5 lacs.

Taxpayers should keep in mind that they will be liable to pay surcharge if their taxable income exceeds 50 lacs. Rate of surcharge increases with increase in level of income ranging from 10%-37% of income tax payable.

Additionally, health & education cess at 4% will also be levied on the amount of income tax plus surcharge.

Expert 2: Dr. Suresh Surana, Founder, RSM India

The income tax slab rates for Senior Citizens aged more than 60 years but less than or equal to 80 (as per the old tax regime) are as follows:

Note(i)*:– Any resident senior citizen whose age is more than 60 years but less than or equal to 80 years has a basic exemption limit of Rs. 3,00,000 as mentioned in the above table. Further, any resident taxpayer who is a super senior citizen whose age is more than 80 years has a basic exemption limit of Rs. 5,00,000 instead of Rs. 3,00,000.

Note(ii)#:– Marginal relief is available to ensure that the additional income tax payable, including surcharge of 10%, 15%, 25% or 37% on the excess of income over Rs. 50,00,000, Rs. 1,00,00,000, Rs. 2,00,00,000 or Rs. 5,00,00,000 as the case may be, is limited to the amount by which the income is more than Rs. 50,00,000, Rs. 1,00,00,000, Rs. 2,00,00,000 or Rs. 5,00,00,000 as the case may be. However, no marginal relief shall be available in respect of the health and education cess.

Note(iii)^:- Maximum rate of surcharge on tax payable on income chargeable to special tax rate under section 111A, 112A, 112, 115AD(1)(b) and dividend income shall be 15%.

Note(iv)**:- Rebate u/s 87A is applicable in case of new tax regime and needs to be availed for the amount of tax payable or Rs. 12,500, whichever is lesser, resulting in NIL tax liability provided the taxpayers total income is upto Rs. 5,00,000.

Note(v):- Special income would be chargeable @ special tax rates mentioned in Section 111A, 112, 112A, etc.

Further, any taxpayer availing the concessional tax regime / new tax regime would not be eligible to claim the following deductions (which can be claimed in old tax regime):

· 10(13A) – House Rent Allowance

10(5) – Leave travel Concession

· 10(14) – Special allowance detailed in Rule 2BB (such as children education allowance, hostel allowance, etc. other than transport allowance, travel allowance, daily allowance).

· 10(17) – Allowances received by MP, member of state legislature, etc.

· 10(32) – Clubbing benefit of Rs. 1500 per minor child

· 10AA – Deduction for SEZ unit

· Section 16 – Standard Deduction of Rs. 50000, Entertainment Allowance, Professional Tax

· 24(b) – Interest on borrowed loan for a Self Occupied property or Vacant Property u/s 23(2)

· 32(1)(iia) – Additional Depreciation

· 32AD – Investment Allowance for investment in Andhra Pradesh / Telangana / Bihar / West Bengal

· 33AB – Tea / Coffee / Rubber Development

33ABA – Site Restoration Fund

· 35(2AA) – Deduction for Payment to National Laboratory or University or IIT

· 35AD – Deduction in respect of specified business

· 35CCC – Expenditure on agricultural extension project

· 57(iia)- Family pension

· Any provision of chapter VI – A – section 80C, 80D etc. However, Section 80CCD(2) (employer contribution on account of employee in a notified pension scheme) can be claimed.

Source: https://www.livemint.com/money/personal-finance/senior-vs-super-senior-citizens-what-are-the-income-tax-slabs-available-11670608995415.html