A message circulating on social media claims that as India commemorates 75 years of its Independence, senior citizens above 75 years of age will no longer have to pay taxes.
The Income Tax Department has clarified that the above news circulating on social media is entirely false. Therefore, it has advised everyone not to believe such misinformation.
As we age, our financial responsibilities and liabilities change. In India, senior citizens benefit from various tax exemptions and deductions. But are Indian senior citizens over 75 years old required to pay income tax? Let’s explore this topic.
Who Are Senior Citizens? According to income tax regulations, individuals between the ages of 60 and 80 are classified as senior citizens, while those over 80 are referred to as super senior citizens.
It is important to note that all senior citizens must pay taxes on their income. However, under Section 194P of the Income Tax Act of 1961, they are entitled to certain tax exemptions compared to other taxpayers.
What is the Tax Exemption Limit for Senior Citizens? In India, senior citizens are classified into two categories: senior citizens (aged 60-79) and super senior citizens (aged 80 years and above). The tax exemption limit for senior citizens is ₹3 lakhs, whereas, for super senior citizens, it is ₹5 lakhs.
Do Senior Citizens Over 75 Years of Age Need to Pay Income Tax? According to the Income Tax Act of 1961, seniors over 75 are exempt from paying income tax, provided they meet certain conditions. These conditions include:
- The individual must be 75 years or older.
- The individual should only have a pension and interest income.
- The individual should not have any income from business or profession.
If a senior citizen over 75 fulfills these conditions, they are not required to pay income tax. However, they must still file their Income Tax Returns (ITR) if their total income exceeds the exemption limit.
Exemption from Filing Income Tax Returns (ITR):
Senior citizens over the age of 75 can be exempt from filing ITR under specific circumstances:
- Senior citizens who only receive pension income are not required to file an ITR.
- Senior citizens who earn income from a pension and interest from a bank notified explicitly by the government also do not need to file an ITR.
- They must submit a declaration to the bank to qualify for this exemption. In this case, TDS deductions and rebates under Section 87A will apply to them under Chapter VI-A.
What are the Tax Benefits for Senior Citizens?
Senior citizens in India enjoy several tax benefits, including:
- Higher Exemption Limit: Senior citizens have a higher exemption limit than non-senior citizens.
- Lower Tax Rates: Senior citizens are eligible for lower tax rates on their income.
- Exemption from Tax Deduction at Source (TDS): Senior citizens are exempt from TDS on their interest income.
- Exemption from Advance Tax: Senior citizens do not need to pay advance tax on their income.
Seniors over 75 are exempt from paying income tax if they meet specific conditions. Nonetheless, they must still file their ITR if their total income exceeds the exemption limit.
Senior citizens in India enjoy various tax benefits, including higher exemption limits, lower tax rates, and exemptions from TDS and advance tax.