Senior Citizen Income Tax Reliefs FY 2025-26: Pension, 80TTB, TDS

Senior citizens in India get a deliberately softer tax regime: a higher basic exemption, a special ₹50,000 interest deduction, a bigger health-premium limit, a doubled TDS threshold on bank interest and no advance-tax obligation for those without business income. Most benefits apply for FY 2025-26 (AY 2026-27) and continue under the Income-tax Act, 2025 from 1 April 2026. This guide consolidates every relief and shows which regime – old or new – actually unlocks it.

Who counts as a senior citizen

An individual aged 60 or more at any time during the financial year is a senior citizen, and one aged 80 or more is a super senior citizen. A few benefits, such as Form 15H (15G/15H are merged as Form 121 from tax year 2026-27), require resident status in India. The age-specific exemption slabs apply under the old regime only, while the new regime offers everyone the same slabs.

Higher exemption limits and the regime split

Under the old regime, the basic exemption for FY 2025-26 is ₹3,00,000 for senior citizens and ₹5,00,000 for super senior citizens, against ₹2,50,000 for others. Under the new regime the exemption is ₹4,00,000 for all ages in FY 2025-26, with the rebate making income up to ₹12 lakh effectively tax-free. Many retirees therefore pay no tax under either regime – but only the old regime carries the age-specific deductions listed below.

Pension income and the standard deduction

Pension is taxed as salary, so it earns the standard deduction: ₹50,000 under the old regime and ₹75,000 under the new regime, where the higher amount has applied since FY 2024-25 and continues. Family pensioners get a separate, smaller deduction under their own provision. A retired couple drawing taxable pensions should evaluate both regimes every year, because the new regime’s bigger standard deduction and rebate can outweigh the old regime’s 80TTB and 80D benefits depending on interest income and medical spend.

Interest income: 80TTB, TDS and Form 15H

Under the old regime, section 80TTB lets a resident senior citizen deduct up to ₹50,000 of interest earned in a year from deposits with banks and post offices – savings accounts, fixed deposits, recurring deposits and the Senior Citizens’ Savings Scheme all qualify. There is no 80TTB under the new regime, which is often the deciding factor for deposit-heavy retirees.

Banks deduct 10% TDS on deposit interest under section 194A once it crosses the threshold, and the senior citizen limit is ₹1,00,000 for FY 2025-26 (doubled from ₹50,000), against ₹50,000 for other resident taxpayers. If your total income is below the taxable limit, submit Form 15H to each bank and post office at the start of every financial year so that no TDS is cut at all. TDS wrongly deducted is not lost – it appears in 26AS/AIS and is credited when you file – but it blocks your cash until refund season.

Health cover and medical costs

Under the old regime, health-insurance premiums paid for a senior citizen (self or spouse) earn a deduction up to ₹50,000 a year under section 80D, and up to ₹5,000 of preventive health-check costs counts within the same limit. Where no suitable policy is available, actual medical expenditure on a senior citizen can be claimed up to the same ₹50,000 ceiling. Premiums for senior-citizen parents get their own separate limit, so a taxpayer insuring them can claim up to ₹50,000 for the parents in addition to the self limit. Keep premium receipts, checkup bills and hospital invoices together, because clean documentation is what protects the claim.

Advance tax, ITR facilities and deposit rates

A resident senior citizen with no income from business or profession is exempt from advance tax – the entire tax is settled as self-assessment when filing the return, with no quarterly deadlines to track. Taxpayers aged 80 or above can additionally file ITR-1 (Sahaj) or ITR-4 (Sugam) in physical paper form, and the e-filing portal pre-fills pension, interest and TDS data for everyone. Banks also price deposits in seniors’ favour: most offer roughly 0.25% to 0.75% extra on fixed deposits for those aged 60 and above, and the Senior Citizens’ Savings Scheme adds a government-backed quarterly-payout option.

Use the advance tax calculator only if you do carry business income, because everyone else in this age group can safely ignore instalment dates. If a tax demand surprises you at filing time, an income tax consultant can review whether a regime switch would have avoided it. Both steps take minutes compared with the cash-flow damage of a missed instalment or an avoidable regime error.

What changes from 1 April 2026

The Income-tax Act, 2025 renumbers the deduction and TDS provisions but continues the substance – the pension standard deduction, the senior interest and medical limits, the advance-tax exemption and Form 15H all survive into FY 2026-27. Section numbers will differ on forms and portals for AY 2027-28, so follow the new utilities rather than old section references. Check the latest CBDT notifications before claiming, because minor rule tweaks surface each year.

Key takeaways

• 80TTB ₹50,000 and 80D ₹50,000 are old-regime benefits; the new regime instead gives a ₹75,000 standard deduction and a ₹4 lakh exemption.
• The senior TDS threshold on bank interest is ₹1,00,000 for FY 2025-26; nil-tax residents should file Form 15H with every bank.
• Seniors without business income pay no advance tax, and those aged 80+ can file ITR-1 or ITR-4 on paper.
• From 1 April 2026 the reliefs continue under the Income-tax Act, 2025 with renumbered sections.

Frequently asked questions

What is the TDS limit on bank interest for senior citizens in FY 2025-26?

Banks cut 10% TDS under section 194A only when a senior citizen’s aggregate interest for the year crosses ₹1,00,000. The limit for other resident taxpayers is ₹50,000.

Is 80TTB available under the new tax regime?

No, 80TTB is an old-regime-only deduction. The new regime compensates with a ₹75,000 standard deduction, so compare regimes on your actual interest income before choosing.

Can a senior citizen skip advance tax completely?

Yes, if there is no business or professional income. Resident senior citizens are exempt from advance tax and settle the tax through self-assessment while filing.

Can an 85-year-old file a paper ITR?

Yes. Resident individuals aged 80 or above can file ITR-1 or ITR-4 in physical paper form, though e-filing with pre-filled data is usually faster.

What standard deduction applies to pension income?

Pension gets the salary standard deduction: ₹50,000 under the old regime and ₹75,000 under the new regime for FY 2025-26. Family pension follows its own deduction provision.

Disclaimer: Tax laws change frequently. Verify current rates and deadlines on the official portals (incometax.gov.in, gst.gov.in) or consult a qualified professional before acting.