Like all taxpayers, senior residents should additionally pay revenue tax on their revenue. Nonetheless, seniors are provided further tax advantages to assist them benefit from their revenue and investments.

After Funds 2020, particular person taxpayers, together with seniors, with no enterprise revenue can select between the outdated tax regime and the brand new concessional regime. Listed below are three issues you must know in regards to the revenue tax slabs for senior residents.

1. Previous & New Tax Slabs for Seniors

Senior and tremendous senior residents can now select between the outdated and new tax regimes to scale back their tax liabilities. Whereas the relevant tax price is decrease within the new regime, a taxpayer should forgo nearly all of the deductions that may be claimed below the older regime.

Right here’s the outdated tax regime for senior residents.

Earnings Tax Slabs Tax Price
As much as ₹ 3 lakhs Nil
₹ 3 lakhs to ₹ 5 lakhs 5%
₹ 5 lakhs to ₹ 10 lakhs 20%
₹ 10 lakhs and above 30%

The brand new tax regime is as follows-

Earnings Tax Slabs Tax Price
As much as ₹ 2.5 lakhs Nil
₹ 2.5 lakhs to ₹ 3 lakhs 5%
₹ 3 lakhs to ₹ 5 lakhs 5%
₹ 5 lakhs to ₹ 7.5 lakhs 10%
₹ 7.5 lakhs to ₹ 10 lakhs 15%
₹ 10 lakhs to ₹ 12.5 lakhs 20%
₹ 12.5 lakhs to ₹ 15 lakhs 25%
₹ 15 lakhs and above 30%

Well being and Schooling Cess @4% of revenue tax is relevant on each slab, besides the Nil slab with revenue of as much as ₹ 2.5 lakhs.

2. Previous & New Tax Slabs for Tremendous Senior Residents

Listed below are the tax slabs for tremendous seniors (above 80 years) as per the outdated regime:

Earnings Tax Slabs Tax Price
As much as ₹ 5 lakhs Nil
₹ 5 lakhs to ₹ 10 lakhs 20%
₹ 10 lakhs and above 30%

The brand new tax slabs for tremendous seniors are as follows-

Earnings Tax Slabs Tax Price
As much as ₹ 2.5 lakhs Nil
₹ 2.5 lakhs to ₹ 5 lakhs 5%
₹ 5 lakhs to ₹ 7.5 lakhs 10%
₹ 7.5 lakhs to ₹ 10 lakhs 15%
₹ 10 lakhs to ₹ 12.5 lakhs 20%
₹ 12.5 lakhs to ₹ 15 lakhs 25%
₹ 15 lakhs and above 30%

Well being and Schooling Cess @4% of revenue tax is relevant on each slab, besides the Nil slab with revenue of as much as ₹ 2.5 lakhs.

3. Tax Deductions Out there for Seniors 

Listed below are among the revenue tax deductions completely obtainable for senior residents.

  • Commonplace deduction of as much as ₹ 50,000 in a monetary 12 months on pensions obtained by way of annuity funds.
  • Deduction of as much as ₹ 50,000 in a monetary 12 months on premiums paid in the direction of a medical insurance coverage or medical bills below Part 80D of the Indian Earnings Tax Act. Dependent senior residents also can declare a deduction of as much as ₹ 1 lakh if affected by a essential sickness below Part 80DDB.
  • Deduction of as much as ₹ 50,000 on curiosity revenue earned from the put up workplace, financial savings account, fastened or recurring deposit below Part 80TTA.

 Make investments Sensible to Enhance Your Retirement Earnings 

Merchandise like retirement plans and medical insurance are a superb means for seniors to scale back their tax liabilities, whereas including extra safety and stability to their retirement life. Search for a reputed insurer to know extra in regards to the obtainable merchandise and their tax advantages.

You can too seek the advice of a tax advisor to know extra in regards to the tax slabs and determine whether or not the outdated or new tax regime will help you save extra.

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