The financial year 2025-26 for senior citizens is going to be full of happiness. The central government has announced several important tax benefits for people above 60 years of age in Budget 2025. With these new rules, the elderly will have to pay less tax on their income and will save more money in their hands.
The biggest advantage of these rules, which comes into force from 1 April 2025, is an increase in the range of tax deduction (TDS) on interest income. Apart from this, tax exemption has also been given on rental income and income from other sources. Let us know what benefits will be given to the senior cities with these new rules and how more money will be saved in their pockets.
Senior Citizen TDS profit from 1 April 2025
Finance Minister Nirmala Sitharaman has made several relief provisions for senior citizens in Budget 2025. The most important of these is an increase in the range of TDS on interest income. Let’s take a look at these major benefits:
| Type of profit | Old limit | New border (from 1 April 2025) |
| TDS limit on interest income | ₹ 50,000 | ₹ 1,00,000 |
| TDS limit on rental income | ₹ 2,40,000 per year | ₹ 6,00,000 per year |
| NSS account withdrawn | Taxable | Tax free (after 29 August 2024) |
| Interest on bank fd | Tax free up to ₹ 50,000 | Tax free up to ₹ 1,00,000 |
| Interest on post office deposit | Tax free up to ₹ 50,000 | Tax free up to ₹ 1,00,000 |
| Interest on cooperative bank deposit | Tax free up to ₹ 50,000 | Tax free up to ₹ 1,00,000 |
TDS limit on interest income
The biggest advantage for senior cities is an increase in the limit of TDS on interest income. Now from 1 April 2025:
- TDS limit on interest income will increase from ₹ 50,000 to ₹ 1,00,000
- With this, no TDS will be deducted up to ₹ 1 lakh on the interest received on bank FD, post office deposit and cooperative bank deposits.
- This benefit will be available to all senior citizens aged 60 years or older.
- This will save more money in the pockets of the elderly and they will not have to wait for tax refund.
TDS relief on rental income
The government has also given great relief to senior citizens on rental income:
- TDS limit on rental income has increased from ₹ 2.40 lakh per year to ₹ 6 lakh per year
- Now no TDS will be deducted on rent of up to ₹ 50,000 per month
- This will give great relief to the elderly who get income from fare
- More money will come in their hands and it will be easy to fill tax returns
Tax exemption on withdrawal from NSS account
National Savings Scheme (NSS) is also good news for account holders:
- After 29 August 2024, the withdrawal from NSS account will be completely tax free
- Earlier, this exemption was available only on the death of the account holder
- This will make it easier to withdraw money from old NSS accounts
- Senior citizens will get more returns on their savings
Interest benefits on bank FD and other deposits
Fixed Deposit (FD) and interest on other deposit schemes are also relieved:
- No TDS will be deducted at interest of up to ₹ 1 lakh on bank FD
- Interest up to ₹ 1 lakh on post office deposits will also be free TDS will be free
- The same benefit will be available on deposit schemes of cooperative banks
- This will give senior citizens more returns on their savings
Relief in tax return filing
The government has also given relief to senior citizens in tax returns filing:
- People above 75 years of age exempted from filing tax returns
- This exemption will be available only when their income is only from pension and bank interest
- This will relieve the elderly from the mess of the tax compliance.
- They will not have to worry about filing returns every year
Other important benefits
Apart from these major benefits, senior citizens will also get some other benefits:
- TCS limit increased from ₹ 7 lakh to ₹ 10 lakh on money sent abroad under LRS
- TCS was removed on money sent abroad for education
- This will provide relief to the parents of children studying abroad
- More TDS/TCS on non-filers also removed
How beneficial for senior citizens?
These new rules will prove beneficial for senior citizens in many ways:
- More money will be saved in their pocket
- Will not have to wait long for tax refund
- Tax Compliance’s mess will be reduced
- You will get better returns on your savings
- Economic security after retirement will increase
How to take advantage of new rules?
Senior citizens can take care of some things to take full advantage of these new rules:
- Give information about the new TDS limit to your bank and post office
- Mention the new TDS limit in the rental contract
- Plan to withdraw money from NSS accounts
- Change your investment strategy for tax savings
- People over 75 years of age take advantage of tax return exemption
Rejuvenation
This article is written only with informative purpose. Although the information given in it is based on government announcements, the rules may change. Please consult your tax advisor before taking any financial decision. The author or website will not be responsible for any wrong decision.
