Personal Finance News
How much tax senior citizens pay on ₹9-15 lakh in the new regime, what's expected in Budget 2025?
.png)
4 min read | Updated on January 24, 2025, 18:29 IST
SUMMARY
Budget expectations for senior citizens: Tax experts are hoping that the upcoming budget may tweak the new tax regime to either make income up to ₹10 lakh tax-free or introduce a new slab to provide relief to individuals earning ₹15-20 lakh annually.
Final changes in tax rules would be known only after the budget presentation | Representational image/Source: Shutterstock
The tax cuts, if announced, may also benefit senior citizens, who are currently earning a salary or pension.
Individual residents aged 60 years or above but less than 80 years are considered senior citizens for tax-filing purposes.
Under the new tax Regime, senior citizens having a pension income of up to ₹7.75 lakh are not required to pay any taxes due to the standard deduction of ₹75,000 and a rebate of ₹25,000 allowed under section 87A.
However, income between ₹7-10 lakh is taxed at the rate of 10% and income between ₹10-12 lakh is taxed at 15%. Income between ₹12-15 lakh is taxed at 20%.
This article looks at the tax liabilities of senior citizens having a taxable pension income of ₹9 lakh, ₹10 lakh, ₹12 lakh and ₹15 lakh respectively in FY 2024-25 under the new tax regime. Please note that this calculation assumes the senior citizen resides in a metro city and has no other available deductions.
Tax on ₹9 lakh pension in FY 2024-25 in the new regime
For FY 2024-25, the new regime provides a standard deduction of ₹75,000. Therefore, the gross total income to be considered for calculating the tax liability of a senior citizen earning ₹9 lakh pension would be ₹8.25 lakh (₹9 lakh-₹75,000).
The tax breakup is shown in the following table:
| Gross total income | ₹8,25,000 |
|---|---|
| Total taxable Income | ₹8,25,000 |
| Income tax slab | ₹7,00,001 - ₹10,00,000 |
| Tax payable after rebate/surcharge | ₹32,500 |
| Final tax payable (Includes health and education cess) | ₹33,800 |
Tax on ₹10 lakh pension in FY 2024-25 in the new tax regime
The gross total income to be considered for calculating the tax liability of a senior citizen earning ₹10 lakh pension would be ₹9.25 lakh (₹10 lakh-₹75,000).
| Gross total income | ₹9,25,000 |
|---|---|
| Total taxable Income | ₹9,25,000 |
| Income tax slab | ₹7,00,001 - ₹10,00,000 |
| Tax payable after rebate/surcharge | ₹42,500 |
| Final tax payable (Includes health and education cess) | ₹44,200 |
Tax on ₹12 lakh pension in FY 2024-25 under the new regime
The gross total income to be considered for calculating the tax liability of a senior citizen earning ₹12 lakh pension would be ₹11.25 lakh (₹12 lakh-₹75,000).
According to the income-tax calculator, the total tax liability of a person having a taxable salary of ₹12 lakh is ₹71,500.
| Gross total income | ₹11,25,000 |
|---|---|
| Total taxable Income | ₹11,25,000 |
| Income tax slab | ₹10,00,001 - ₹12,00,000 |
| Tax payable after rebate/surcharge | ₹68,750 |
| Final tax payable (Includes health and education cess) | ₹71,500 |
Tax on ₹15 lakh pension in FY 2024-25 in new tax regime
The gross total income to be considered for calculating the tax liability of a senior citizen earning ₹15 lakh pension would be ₹14.25 lakh (₹15 lakh-₹75,000).
According to the income-tax calculator, the total tax liability of a person having a taxable salary of ₹15 lakh is ₹1,30,000.
| Gross total income | ₹14,25,000 |
|---|---|
| Total taxable Income | ₹14,25,000 |
| Income tax slab | ₹12,00,001 - ₹15,00,000 |
| Tax payable after rebate/surcharge | ₹1,25,000 |
| Final tax payable (Includes health and education cess) | ₹1,30,000 |
Senior citizens may calculate their tax liability using the following income-tax calculator
What may change in Budget 2025?
However, final changes in tax rules, if any, would be known only after the budget presentation by the finance minister on February 1, 2025.
About The Author
Next Story
