Many pensioners may think that income tax filing becomes optional after retirement, especially if they are no longer receiving a salary income. However, pension income remains taxable in most cases, and senior citizens are still required to file an Income Tax Return (ITR) depending on their total income, tax regime, deductions and other financial transactions during the year.
Filing ITR can also help pensioners claim tax refunds, correctly report pension and interest income, carry forward certain losses, and maintain updated financial records. The last date to file the for pensioners (who typically file ITR-1) is July 31, 2026 for the assessment year 2026-27. If you miss the July deadline, you can file a belated return until December 31, 2026, with a penalty.
The income tax department has already enabled both online filing and Excel utility for ITR-1 and ITR-4, allowing taxpayers to begin filing returns for income earned in financial year 2025-26.
Tax slabs for senior citizens
Tax rates for individual ( both resident or non-resident), 60 years or more but less than 80 years of age anytime during the previous year are as under, as per the income tax department.
Old tax regime
- Up to ₹3 lakh: Nil
- ₹3 lakh to ₹5 lakh: 5%
- ₹5 lakh to ₹10 lakh: 20%
- Above ₹10 lakh: 30%
New tax regime
- Up to ₹ 4 lakh: Nil
- ₹4 lakh to ₹8 lakh: 5%
- ₹8 lakh to ₹12 lakh: 10%
- ₹12 lakh to ₹16 lakh: 15%
- ₹16 lakh to ₹20 lakh: 20%
- ₹20 lakh to ₹24 lakh: 25%
- Above ₹24 lakh: 30%
Under the old regime, a rebate of ₹12,500 is allowed for an income up to ₹5 lakh, while the new tax regime allows rebate of ₹60,000 for income up to ₹12 lakh, according to the income tax rules.
However, the rebate cannot exceed the total income tax payable before the levy of health and education cess.
Key deductions available to pensioners
Pensioners can claim several deductions under the Income Tax Act, particularly if they opt for the old tax regime. These include:
Section 80TTB
Senior citizens can claim deduction of up to ₹50,000 on interest earned from:
- Savings accounts
- Fixed deposits
- Post office deposits
- Deposits with co-operative banks
Section 80D
Deduction for health insurance premium:
- Up to ₹50,000 for senior citizens
Section 80DDB
Deduction on expenses incurred by an individual on himself or a dependent towards the treatment of specific diseases:
- Up to ₹1 lakh for senior citizens
Section 80C
Under the Income Tax Act 2025, Section 80C has been restructured and combined under Section 123. It allows a maximum deduction of ₹1.5 lakh per financial year on eligible investments and expenditures, including:
- Life insurance premium
- Provident Fund
- National Savings Certificate (NSC)
- Housing loan principal repayment
Section 24(b)
Deduction on housing loan interest:
- Up to ₹2 lakh for self-occupied property under old tax regime
Relief from payment of Advance Tax
As per Section 208, Income Tax Act,1961 every person whose estimated tax liability for the year is ₹ 10,000 or more, shall pay advance tax.
But, Section 207, Income Tax Act,1961 gives relief from payment of advance tax to a resident senior citizen. Thus, such taxpayers not having any Income from business or profession, is not liable to pay . Section 234B and 234C are not applicable for senior and super senior citizen filing ITR 1 and ITR 2.
Who needs to file which ITR forms?
- ITR-1 form: Salaried individual with income up to ₹50 lakh from one house property, salary or pension, other sources such as interest, dividend, and family pension or agricultural income up to ₹5,000.
- ITR-2 form: Individual or Hindu Undivided Family (HUF) without business income. Income exceeding the conditions in ITR-1, and comes from multiple house properties, higher capital gains or foreign assets and income.
- ITR-3 form: Individual or HUF with income from or profession.
- ITR-4 form: Taxpayers with presumptive income from business or profession.
- ITR-5 form: For use by a firm, Limited Liability Partnership (LLP), Association of Persons (AOP), Body of Individuals (BOI), or Artificial Juridical Person (AJP).