Budget 2024 Overview

The Budget 2024 unveils significant updates to tax slabs aimed at simplifying calculations and providing taxpayer relief for FY 2024-25. The revised tax rates under the new regime are:

• Up to Rs 3 lakh: Nil
• Rs 3 lakh to Rs 7 lakh: 5%
• Rs 7 lakh to Rs 10 lakh: 10%
• Rs 10 lakh to Rs 12 lakh: 15%
• Rs 12 lakh to Rs 15 lakh: 20%
• Income above Rs 15 lakh: 30%

Enhancements include:

• Standard Deduction: Increased from Rs 50,000 to Rs 75,000.
• Family Pension Deduction: Boosted from Rs 15,000 to Rs 25,000.
• Pension Scheme Contribution: Deduction under Section 80CCD (2) increased from 10% to 14% of salary.

Senior and Super Senior Citizens Defined

Under the Income-tax Act, 1961, a senior citizen is at least 60 but less than 80, while a super senior citizen is 80 or older.

Resident Individual Categorization

Residents are grouped by age:

• Individuals below 60 years
• Senior citizens 60 to 80 years
• Super senior citizens 80 years and above

Tax Slabs for Senior Citizens

Senior citizens can choose between old or new tax regimes. The new regime offers lower rates but limits exemptions and deductions. Non-resident seniors adhere to standard provisions.

Old Tax Regime: Senior Citizens

• Up to Rs 3,00,000: Nil
• Rs 3,00,001 to Rs 5,00,000: 5% over Rs 3,00,000
• Rs 5,00,001 to Rs 10,00,000: Rs 10,000 + 20% over Rs 5,00,000
• Above Rs 10,00,000: Rs 1,10,000 + 30% over Rs 10,00,000

Tax Slabs: Super Senior Citizens

• Up to Rs 5,00,000: Nil
• Rs 5,00,001 to Rs 10,00,000: 20% over Rs 5,00,000
• Above Rs 10,00,000: Rs 1,00,000 + 30% over Rs 10,00,000

Note: Health and Education Cess of 4% applies.

Surcharge

• Above Rs 50 Lakh: 10%
• Above Rs 1 Crore: 15%
• Above Rs 2 Crore: 25%
• Above Rs 5 Crore: 37%

New Tax Regime: Senior and Super Senior Citizens

The regime offers uniform rates without age differentiation, with limitations on deductions.

• Up to Rs 3,00,000: Nil
• Rs 3,00,001 to Rs 6,00,000: 5%
• Rs 6,00,001 to Rs 9,00,000: 10%
• Rs 9,00,001 to Rs 12,00,000: 15%
• Rs 12,00,001 to Rs 15,00,000: 20%
• Above Rs 15,00,000: 30%

Surcharge remains the same. Note: Specific age calculation rules apply, based on April birthdays.

Additional Insights:
Senior citizens often derive income from pensions, interest, properties, and capital gains. Opting for the new regime involves sacrificing several benefits like higher exemptions and allowances available under the old regime.

Benefits and Strategies for Senior Citizens

• Higher Income Exemption Limit
• Medical Expenses Deduction (Section 80DDB)
• Interest Income Deduction (Section 80TTB)
• Medical Insurance Premium Deductions
• Tax-free Interest on Deposits
• Reverse Mortgage Scheme
• Senior Citizen Savings Scheme

Choosing the Right Tax Regime

Consider tax liability comparisons, deductions, exemptions, and financial planning when selecting a regime.

FAQs

• Can senior citizens opt for the new regime? Yes, but with conditions.
• Basic exemption limit for seniors? Rs. 3 lakh under the new regime.
• Claiming deductions under the old regime? Use various sections like 80C, 80D.
• Is the new regime beneficial? It varies per individual situation.
• Switching regimes? Allowed each financial year.

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