Expert 1: Nidhi Manchanda, Certified Financial Planner, Head of Training, Research & Development at Fintoo
As per Income Tax Act, aged taxpayers are labeled as Senior residents and Super Senior residents.
Senior residents are outlined as a person who’s 60 years of age or above however lower than 80 years of age. Anybody who’s 80 years previous or above is taken into account to be a brilliant senior citizen as per Income Tax Act. This bifurcation is completed to provide further tax advantages for individuals reaching 80 years.
One ought to observe that underneath the previous tax regime, senior residents get a primary exemption of three,00,000 i.e., an revenue earned as much as 3,00,000 is tax free. On the opposite hand, for tremendous senior residents, this primary exemption restrict is raised to five,00,000.
You could verify the revenue tax slabs for senior and tremendous senior residents underneath previous tax regime within the desk beneath: –
For Senior Citizens (Old Tax Regime) Income Tax SlabIncome Tax RateAs much as ₹3,00,000NIL ₹3,00,001 – ₹5,00,0005% of revenue exceeding ₹3,00,000 ₹5,00,001 – ₹10,00,000 ₹10,000 + 20% of revenue exceeding ₹5,00,000Above ₹10,00,000 ₹1,10,000 + 30% of revenue exceeding ₹10,00,000For Super Senior Citizens (Old Tax Regime) Income Tax SlabIncome Tax RateAs much as ₹5,00,000NIL ₹5,00,001 – ₹10,00,00020% of revenue exceeding ₹5,00,000Above ₹10,00,000 ₹1,00,000 + 30% of revenue exceeding ₹10,00,000
It is necessary to notice {that a} Rebate of Rs. 10,000 u/s 87A is relevant for senior residents if their whole revenue isn’t greater than 5 lacs. Therefore, successfully senior residents won’t should pay any tax if their revenue is as much as 5 lacs. However, if the revenue crosses the mark of 5 lacs, then they should pay tax on your complete revenue exceeding 3 lacs.
If choosing the brand new tax regime, no further exemption is out there for senior and tremendous senior residents. Under the brand new tax regime, there is just one class of slabs which is relevant for all people with no categorization of senior or tremendous senior residents. Here, the fundamental exemption restrict is decrease at 2.5 lacs.
Opting for a brand new tax regime means decrease tax charges however with a drawback of not with the ability to declare a lot of the deductions and exemptions like 80C, 80D, HRA, 80TTB and so on.
In the next desk, you can see the revenue tax slabs for senior and tremendous senior residents underneath the brand new tax regime: –
For Senior and Super Senior Citizens (New Tax Regime) Income Tax SlabIncome Tax RateAs much as ₹2,50,000Nil ₹2,50,001 – ₹5,00,0005% of revenue exceeding ₹2,50,000 ₹5,00,001 – ₹7,50,000 ₹12,500 + 10% of revenue exceeding ₹5,00,000 ₹7,50,001 – ₹10,00,000 ₹37,500 + 15% of revenue exceeding ₹7,50,000 ₹10,00,001 – ₹12,50,000 ₹75,000 + 20% of revenue exceeding ₹10,00,000 ₹12,50,001 – ₹15,00,000 ₹1,25,000 + 25% of revenue exceeding ₹12,50,000Above ₹15,00,000 ₹1,87,500 + 30% of revenue exceeding ₹15,00,000
Individuals ought to observe that rebate of as much as 12,500 u/s 87A is out there within the new tax regime if the revenue isn’t greater than 5 lacs.
Taxpayers ought to take into account that they are going to be liable to pay surcharge if their taxable revenue exceeds 50 lacs. Rate of surcharge will increase with improve in degree of revenue starting from 10%-37% of revenue tax payable.
Additionally, well being & schooling cess at 4% may also be levied on the quantity of revenue tax plus surcharge.
Expert 2: Dr. Suresh Surana, Founder, RSM India
The revenue tax slab charges for Senior Citizens aged greater than 60 years however lower than or equal to 80 (as per the previous tax regime) are as follows:
Total IncomeIncome tax charges (Senior Citizen) underneath Old Tax RegimeTotal IncomeIncome Tax charges (Irrespective of the taxpayer’s age) underneath New Tax RegimeUpto Rs. 3,00,000*NilUpto Rs. 2,50,000*NilRs. 3,00,001 – Rs. 5,00,0005.2% [tax rate 5% plus health and education cess 4% thereon] (Effective Rate is Nil after availing rebate u/s 87A**) of revenue exceeding Rs. 3,00,000Rs. 2,50,001 – Rs. 5,00,0005.2% [tax rate 5% plus health and education cess 4% thereon] (Effective Rate is Nil after availing rebate u/s 87A**) of revenue exceeding Rs. 2,50,000Rs. 5,00,001 – Rs. 7,50,00020.80% [tax rate 20% plus health and education cess 4% thereon] of revenue exceeding Rs. 5,00,000Rs. 5,00,001 – Rs. 7,50,00010.40% [tax rate 10% plus health and education cess 4% thereon] of revenue exceeding Rs. 5,00,000Rs. 7,50,001 – Rs. 10,00,00020.80% [tax rate 20% plus health and education cess 4% thereon] of revenue exceeding Rs. 5,00,000Rs. 7,50,001 – Rs. 10,00,00015.60% [tax rate 15% plus health and education cess 4% thereon] of revenue exceeding Rs. 7,50,000Rs. 10,00,001 – Rs. 12,50,00031.20% [tax rate 30% plus health and education cess 4% thereon] of revenue exceeding Rs. 10,00,000Rs. 10,00,001 – Rs. 12,50,00020.80% [tax rate 20% plus health and education cess 4% thereon] of revenue exceeding Rs. 10,00,000Rs. 12,50,001 – Rs. 15,00,00031.20% [tax rate 30% plus health and education cess 4% thereon] of revenue exceeding Rs. 12,50,000Rs. 12,50,001 – Rs. 15,00,00026.00% [tax rate 25% plus health and education cess 4% thereon] of revenue exceeding Rs. 12,50,000Rs. 15,00,001 – Rs. 50,00,00031.20% [tax rate 30% plus health and education cess 4% thereon] of revenue exceeding Rs. 15,00,000Rs. 15,00,001 – Rs. 50,00,00031.20% [tax rate 30% plus health and education cess 4% thereon] of revenue exceeding Rs. 15,00,000Rs. 50,00,001# – Rs. 1,00,00,00034.32% [(tax rate 30% plus surcharge 10% thereon) plus health and education cess 4% thereon] of revenue exceeding Rs. 50,00,000Rs. 50,00,001# – Rs. 1,00,00,00034.32% [(tax rate 30% plus surcharge 10% thereon) plus health and education cess 4% thereon] of revenue exceeding Rs. 50,00,000Rs. 1,00,00,001# – Rs. 2,00,00,00035.88% [(tax rate 30% plus surcharge 15% thereon) plus health and education cess 4% thereon] of revenue exceeding Rs. 1,00,00,000Rs. 1,00,00,001# – Rs. 2,00,00,00035.88% [(tax rate 30% plus surcharge 15% thereon) plus health and education cess 4% thereon] of revenue exceeding Rs. 1,00,00,000Rs. 2,00,00,001# – Rs. 5,00,00,00039% [(tax rate 30% plus surcharge 25%^ thereon) plus health and education cess 4% thereon] of revenue exceeding Rs. 2,00,00,000Rs. 2,00,00,001# – Rs. 5,00,00,00039% [(tax rate 30% plus surcharge 25%^ thereon) plus health and education cess 4% thereon] of revenue exceeding Rs. 2,00,00,000Above 5,00,00,000#5,00,00,001 and above 42.744% [(tax rate 30% plus surcharge 37%^ thereon) plus health and education cess 4% thereon] of revenue exceeding Rs. 5,00,00,000Above 5,00,00,000#42.744% [(tax rate 30% plus surcharge 37%^ thereon) plus health and education cess 4% thereon] of revenue exceeding Rs.5,00,00,000
Note(i)*:- Any resident senior citizen whose age is greater than 60 years however lower than or equal to 80 years has a primary exemption restrict of Rs. 3,00,000 as talked about within the above desk. Further, any resident taxpayer who’s a brilliant senior citizen whose age is greater than 80 years has a primary exemption restrict of Rs. 5,00,000 as a substitute of Rs. 3,00,000.
Note(ii)#:- Marginal reduction is out there to make sure that the extra revenue tax payable, together with surcharge of 10%, 15%, 25% or 37% on the surplus of revenue over Rs. 50,00,000, Rs. 1,00,00,000, Rs. 2,00,00,000 or Rs. 5,00,00,000 because the case could also be, is restricted to the quantity by which the revenue is greater than Rs. 50,00,000, Rs. 1,00,00,000, Rs. 2,00,00,000 or Rs. 5,00,00,000 because the case could also be. However, no marginal reduction shall be obtainable in respect of the well being and schooling cess.
Note(iii)^:- Maximum fee of surcharge on tax payable on revenue chargeable to particular tax fee underneath part 111A, 112A, 112, 115AD(1)(b) and dividend revenue shall be 15%.
Note(iv)**:- Rebate u/s 87A is relevant in case of latest tax regime and must be availed for the quantity of tax payable or Rs. 12,500, whichever is lesser, leading to NIL tax legal responsibility supplied the taxpayers whole revenue is upto Rs. 5,00,000.
Note(v):- Special revenue can be chargeable @ particular tax charges talked about in Section 111A, 112, 112A, and so on.
Further, any taxpayer availing the concessional tax regime / new tax regime wouldn’t be eligible to say the next deductions (which may be claimed in previous tax regime):
· 10(13A) – House Rent Allowance
· 10(5) – Leave journey Concession
· 10(14) – Special allowance detailed in Rule 2BB (resembling kids schooling allowance, hostel allowance, and so on. aside from transport allowance, journey allowance, every day allowance).
· 10(17) – Allowances obtained by MP, member of state legislature, and so on.
· 10(32) – Clubbing good thing about Rs. 1500 per minor little one
· 10AA – Deduction for SEZ unit
· Section 16 – Standard Deduction of Rs. 50000, Entertainment Allowance, Professional Tax
· 24(b) – Interest on borrowed mortgage for a Self Occupied property or Vacant Property u/s 23(2)
· 32(1)(iia) – Additional Depreciation
· 32AD – Investment Allowance for funding in Andhra Pradesh / Telangana / Bihar / West Bengal
· 33AB – Tea / Coffee / Rubber Development
· 33ABA – Site Restoration Fund
· 35(2AA) – Deduction for Payment to National Laboratory or University or IIT
· 35AD – Deduction in respect of specified enterprise
· 35CCC – Expenditure on agricultural extension mission
· 57(iia)- Family pension
· Any provision of chapter VI – A – part 80C, 80D and so on. However, Section 80CCD(2) (employer contribution on account of worker in a notified pension scheme) may be claimed.
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