ITR

Method Of Calculating Income Tax For Senior Citizen Pensioners

There are specific guidelines for measuring the amount of income tax levied on a senior citizen pensioner. Let us have a look at the details.

According to the Income Tax Department, a senior citizen is a person who is 60 years old or more but less than 80 years of age. Senior citizens’ primary income sources include pensions, rental income, savings, and fixed deposits. The Income Tax Act 1961 states that a certain amount of tax will be levied on each income source for a senior citizen. On the other hand, there are many tax exemptions that senior citizens enjoy as per the Government guidelines. Therefore, let us look at senior citizens’ tax and liability structure.

Income Tax Calculator For Senior Citizens- Different Slabs

A person falls under the category of a senior citizen pensioner if he takes retirement from his current job, commonly at the age of 60. Therefore, both senior citizens, as well as super senior citizens fall under this particular category. The Union Budget of FY 22-23 has carefully laid the details of income tax returns for senior citizens as follows:

Exemption for senior citizens from filing income tax returns per Section 194P of the Income Tax Act, 1961. 

Requirements: 

1) Age 75+

2) Resident in the previous year 

3) Only pension and interest income from the designated bank. Effective 1 April 2021.

For Senior Citizens Tax Slab (60-80 years of age):

  • Upto INR 3 lakhs- no tax.
  • INR 3 lakh- INR 5 lakh- 5% on income above INR 3 lakh + 4% cess on income tax.
  • INR 5 lakh- INR 10 lakh- INR 10,000 + 20% tax on income above INR 5 lakh + 4% cess on income tax.
  • More than INR 10 lakh- INR 1,10,000 + 30% tax on income above INR 10 lakh +4% cess on income tax.

For Super Senior Citizens Tax Slab (above 80 years of age):

  • Upto INR 5 lakh- no tax.
  • INR 5 lakh- INR 10 lakh- 20% tax on income above INR 5 lakh + 4% cess on income tax.
  • More than INR 10 lakh- INR 1,00,000 + 30% tax on income above INR 10 lakh +4% cess on income tax.

Income Tax Slab for Senior and Super Senior Citizens FY 2022-23 AY 2023-24

Sources Of Income For Senior Citizens

In order to calculate your income tax returns, you must know what all are considered to be your income sources. The primary sources of income considered for senior citizens include:

  • Pensions
  • Rental income
  • Investment benefits
  • Capital gains
  • Fixed deposits, savings deposits, and more.

Therefore, you need to consider listing the details of each of the income sources mentioned above. Section 80CCC of income tax act also strictly mentioned the guidelines for the same. No matter what, consistency is the key here, although you are not part of the fixed income group or individual taxpayers.

Things To Know: Filing Income Tax For Senior Citizens

There are numerous details that a senior citizen pensioner should follow while filing income taxes. For instance, the list of exemptions and deductions is more significant compared to that of individual taxpayers. In addition, it makes the process lengthy on pen and paper, where you need to provide proof of every other detail that you enumerate. Thus, it is always a better idea to shift to online methods of calculations. Here are some things to keep in mind:

  • You need to assemble all your income details in one place. Make sure that you overlook none while filing your income tax. An excellent online income tax calculator will help you fill in all the details quite seamlessly. 
  • Check for the necessary exemptions. For instance, it can be either rebate u/s 87 (for INR 5 lakh income), pensions, reverse mortgage schemes, health insurance, and rent allowances. You also don’t need to pay advance taxes and TDS.
  • Make sure that you hire a professional to enumerate your income tax on a regular basis. It will help you get a grip on online methods and maintain the process’s accuracy.

Advantages Of Income Tax Calculator For Measuring Income Tax for Senior Citizens Pensioners

Filling up your ITR-1 or ITR 4 filing process has become quite simple these days with the help of online income tax calculator tools. You get not only accurate results but also receive numerous financial benefits from the online system. It has become a trustworthy system that an increasing number of people are using these days. Here are some highlighted benefits of ITR for pensioners.

  • The online tools guarantee accuracy when it comes to calculating your income tax returns. Human error is a consistent problem while filing income tax on paper. In order to get rid of it, you must shift to online methods. The tools will automatically highlight errors if any.
  • The process becomes easier and faster. You can autofill specific details, which remain the same for every financial year. Moreover, you can quickly calculate your net taxable income from the details with no extra effort. This is precisely why the Government is also encouraging individuals to file income taxes online.
  • An online income tax calculator stores all necessary information when you complete your income tax filing. You do not need to refill all details every time you start filing your income tax annually. It is a very convenient method that can help you eliminate redundancy.
  • While the tools store valid information for further use, you can ensure its confidentiality. Filing income tax on paper can prove harmful, as it can fall into the wrong hands. However, the online data gets stored in an encrypted system. So there is no chance of mishandling your documents.
  • Once you calculate and complete filing the income tax details, you will get an automated completion receipt. You will also receive it via your registered email-id as proof of your accurate income tax filing.
  • You can also save the data without finishing the entire process. For instance, if you are midway through the process and miss out on any crucial document, you can store the incomplete data as a draft. Once you search in the history or saved draft tab, you will immediately get your data and will be able to complete the process.

File Your Income Tax With The Help Of The Best Income Tax Calculating Tool Online – Conclusion

Things have indeed taken a positive but abrupt turn in the recent past regarding filing taxes. The Government is focusing on digitalization, with an increased focus on income taxpayers. It obviously is a big deal for senior citizens, who might require additional help and guidelines to know about the process in detail. If you need to consult professionals, you can contact Vakilsearch. The experts will efficiently walk you through the entire process and make it look as easy as possible. Ensure that you file your income tax as per the guidelines mentioned by the tax department and the Government from time to time.

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