Under the Indian Income Tax Act, a Senior Citizen gets significant tax benefits which include benefits of exemption limit, which can be summarised from the Income Tax Slab applicable to the senior citizen. Here in this post, you will get Income Tax Slab For AY 2021-22 for Senior Citizens.
In budget 2020, FM Smt. Nirmala Sitharaman has announced a new tax regime giving taxpayers an option to pay taxes as per the new tax slab from FY 2020-21 (AY 2021-22) onwards. Here in this post, we will discuss both regimes of Income Tax for senior citizens.
Before knowing the Income Tax Slab for Senior Citizen it is important to know who is Senior Citizen.
Who is Senior Citizen as per Income Tax Act?
An Individual resident is considered a Senior Citizen between the age group of 60 to 80 years, as on the last day of the previous financial year.
Why Should Senior Citizen enjoy Income Tax Benefits?
As per the rich cultural heritage of the country, elders are always respected. They are taken care of in old age with special care. Likewise, the central government is working to keep the culture and moral values intact by offering special Income Tax Benefits to senior citizens.
Senior Citizen Benefit under Income Tax- Here are some significant tax benefits which senior citizen can enjoy.
- Medical Insurance Limit
- Exemption Limit (Under Income Tax Slab)
- No deduction under Reverse Mortgage Scheme
- No Tax on Interest Income (Up to Rs. 50000)
- No Advance Tax etc.
Out of the all above benefits we are here going to discuss, Income Tax Slab For AY 2021-22 For Senior Citizens.
Income Tax Slab For AY 2021-22
As per the budget 2020, under the new regime, the taxpayer has an option to choose either a new regime or stay in the old regime.
New Regime- Here taxpayers can choose to pay tax at lower rates as per the new regime on the condition that they forgo certain permissible exemptions and deductions available under Income Tax, or
Old Regime- To continue to pay taxes under the existing tax rates. The assessee can avail of rebates and exemptions by staying in the old regime and paying tax at the higher rate.
Here you find the chart of income tax slab for AY 2021-22 for senior citizens as per both new and old regimes.
Income Tax Slab For AY 2021-22 For Senior Citizens as per new regime
|Income Tax slab||Income Tax rate for individual New Scheme|
|upto Rs. 250000||NIL- No Tax|
|Rs. 250001 to Rs. 500000||5 % (Tax Rebate u/s 87a is available)|
|Rs. 500001 to Rs. 750000||10%|
|Rs. 750001 to Rs. 1000000||15%|
|Rs. 1000001 to Rs. 1250000||20%|
|Rs. 1250001 to Rs. 1500000||25%|
|Above Rs. 1500000||30%|
Note- The taxpayer opting for concessional rates in the New Tax Regime will have to forgo certain exemptions and deductions available in the existing old tax regime.
Income Tax Slab For AY 2021-22 For Senior Citizens as per old regime
|Income Tax slab||Income Tax rate for Senior Citizen|
|upto Rs. 300000||NIL- No Tax|
|Rs. 300000 to Rs. 500000||5 % of total income exceeding Rs. 300000|
|Rs. 500001 to Rs. 1000000||Rs. 10000 + 20% of total income exceeding Rs. 500000|
|Above Rs. 1000000||Rs. 110000 + 30% of total income exceeding Rs. 1000000|
The following are applicable to both regime of Tax.
Note 1:- An additional 4% health & education cess will be applicable to the tax amount calculates as above.
Note 2:- A tax rebate under section 87A is allowed to individual taxpayers (Age 60 or 60 + but below 80 years) for a maximum amount of Rs. 10000 if the total income is up to Rs. 500000 for FY 2019-20.
Note 3:- Surcharge is additional on the amount of Income tax.
Surcharge applicable to the Senior Citizen
The surcharge over the tax calculated will be charged as per the below table-
|Income Limit||Surcharge rate on amount of Income Tax|
|Net income exceed Rs. 50 Lakhs but does not exceed Rs. 1 Crore||10%|
|Net Income exceed Rs. 1 Crore but does not exceed Rs. 2 Crore||15%|
|Net Income exceed Rs. 2 Crore but does not exceed Rs. 5 Crore||25%|
|Net Income exceed Rs. 5 Crore||37%|
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Disclaimer: The information contained in the above article are solely for informational purpose after exercising due care. However, it does not constitute professional advice or a formal recommendation. The author does not own any responsibility for any loss or damage caused to any person, directly or indirectly, for any action taken on the basis of the above article.
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Compiled by- CA Chirag Agarwal (Practicing Chartered Accountants)