I am a super senior citizen and my income in 2024-25 was bank interest only. FD interest was ₹7.8 lakh and savings bank account interest ₹4,927. I opened an SCSS account a year ago. My wife is a senior citizen aged 74. She had income from bank interest of ₹5.45 lakh and rent of ₹2.64 lakh. We have no insurance or other investments. Pls guide on our ITR liability. -Ramasubramanian
As a super senior citizen—defined as an individual aged 80 years or above—you are eligible for a higher basic exemption limit compared to other taxpayers.
For the financial year 2024-25, the exemption limit stands at ₹5,00,000 under the old tax regime and ₹3,00,000 under the new tax regime. Your total income from bank interest, which includes ₹7,80,000 from fixed deposits and ₹4,927 from a savings account, exceeds these thresholds. Therefore, you are required to file an income tax return (ITR).
Additionally, the interest from your Senior Citizens Savings Scheme (SCSS) account, though not explicitly mentioned, is also taxable and must be reported under “Income from Other Sources,” similar to other interest incomes.
Choosing between old and new tax regimes
Even after considering the deduction allowed under Section 80TTB—where senior citizens can claim up to ₹50,000 in interest income deductions in the old tax regime—your total taxable income remains well above the limit. Our analysis shows that the new tax regime results in lower tax liability for you. Since SCSS interest does not offer additional tax-saving benefits, opting for the new tax regime will likely reduce your overall tax outgo, making it the preferable option.
Your wife, aged 74, falls under the senior citizen category, which applies to individuals between 60 and 79 years of age. Her exemption limit is ₹3,00,000 under both the old and new tax regimes. With income comprising ₹5,45,000 from bank interest and ₹2,64,000 from rental income, she too exceeds the exemption threshold and is obligated to file an ITR. Similar to your case, she would benefit from choosing the new tax regime, as it offers lower tax liability compared to the old system.
It is important to note that the new tax regime allows a rebate of up to ₹7,00,000 for the 2024-25 financial year, meaning individuals with taxable income below this threshold could pay no tax. However, both you and your wife exceed this limit, making it necessary to pay tax in the current assessment year. The rebate limit is expected to increase to ₹12,00,000 from the next financial year, offering greater relief in future filings. The final tax amount you owe will depend on the SCSS interest you earned, which should be included when calculating your total income.
Given these considerations, filing under the new tax regime appears to be the better course of action. Including all sources of interest income, especially from SCSS accounts, ensures compliance with tax laws and avoids penalties. While Section 80TTB may provide some relief in the old regime, it is unlikely to offset your total taxable income. Consulting a qualified chartered accountant can help you accurately prepare your returns and adopt the most beneficial tax structure based on your income and investments.
Bhawna Kakkar, chartered accountant and founder, Kakkar & Company, Chartered Accountants
