Income tax slabs, rates and exemptions for senior citizens: Know how income tax is calculated on pension

Income Tax Slabs for Senior Citizens, Income Tax Rates for Senior Citizens: Salaried people and pensioners mandatorily have to file their Income Tax Return (ITR). However, in Budget 2021-22, the government introduced a new clause in the Income Tax Act, 1961, which no longer requires ITR for senior citizens above 75 years of age if they meet certain criteria.

Here, we will tell you about the income tax slabs, rates and exemptions that senior citizens get.

Income Tax Slab for Senior Citizens (60 to 80 Years)

(pic: official website)

Income tax slab for senior citizens above 80 years

(pic: official website)

Income tax exemption limit for senior citizens

A senior citizen is a person who is 60 or more than 60 years or less than 80 years on the last day of the previous year. The basic exemption limit has been fixed at Rs 3 lakh for retired employees falling between the age of 60 to 80 years. In the case of very senior citizens (above 80 years), the exemption limit has been fixed at Rs 5 lakh.

Is pension taxable in India?

Pension received by retired employees is taxable. This is taxable under the head ‘Salaries’ as income beyond the limit of exemption.

Read this also- 5 tax saving options other than 80C

Tax on Gratuity, Provident Fund for Retired Employees

For government employees, the amount received from PF is tax free. For non-government employees, PF receipts are exempted from tax, if received after rendering at least 5 years of continuous service from a recognized PF.

Gratuity received on retirement is tax free for government employees.

Whereas, for non-government employees, gratuity is exempt from tax in the following cases:

  • Gratuity amount Rs 10 lakh
  • 15 days salary for every year of service
  • Actual gratuity received.

Is family pension taxable?

Family pension is taxable in India. This is taxed under the head ‘Income from other sources’. It is taxable after allowing a deduction of 33.33 per cent or Rs 15000, whichever is less.

Read this also- Income Tax Return Filing: What is ITR 1 Sahaj Form? Check Eligibility & Steps to File Online

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