Senior Citizens tax slabs, rates, standard deduction in new and old tax regimes for AY 2025-26

Senior Citizens tax slabs and rates for AY 2025-26: As the Union Budget 2025 approaches, senior citizens are optimistic about expected tax relief measures to alleviate the burden of rising inflation.

Given that retired individuals rely heavily on their savings, experts have proposed initiatives to ease their financial burden and enhance their quality of life amidst the rising cost of living.

Finance Minister Nirmala Sitharaman had announced several measures for senior citizens in Budget 2024. The government increased the standard deduction for family pensioners to ₹25,000 from ₹15,000 to give much-needed relief to retired persons.

Senior citizen tax slabs for AY 2025-26 under old tax regime

Senior citizen tax slabs for AY 2025-26 under new tax regime

Last year, the finance minister also announced an easier tax filing process under Section 194P for senior citizens aged 75 years and above.

The minister also retained the benefit of tax exemptions or deductions on the interest earned from the Senior Citizens Savings Scheme. Under the SCSS, the maximum investment limit is ₹30 lakh and the scheme is currently offering an interest rate of 8% per annum, which is paid quarterly.

The basic exemption limit under the new tax regime for senior citizens is ₹3 lakh. Under the new tax regime, senior citizens can claim a tax rebate of up to ₹25,000 under Section 87A of the Income Tax Act, 1961, if their income does not exceed ₹7,00,000 in a financial year.

As per the I-T Act, 1961, taxpayers in the age group of 60 to 80 years have been categorised as senior citizens and those above 80 years are treated as super senior citizens.