How to Calculate Income Tax for Senior Citizen with Salary, Pension & Interest Income?

I often get request to calculate income tax for readers and how they can save more tax! It’s not possible for me to calculate it for everyone. So going forward I would pick cases and show how to calculate income tax and if there is scope to save additional tax.

Below is the comment I received:

Dear Amit,

Pl calculate my income tax.

I retired on 31 Jul 17.  My income from Apr 17 to Jul 17 is Rs. 2,50,000.  Thereafter I am getting pension @ Rs. 18,700 per month.  As on 31 Mar 18 estimate interest on my FDs is Rs. 1,15,000. I have invested Rs. 2,00,000 in senior citizen scheme.  Pl confirm how much income tax I have to Pay?

Download: Tax Planning Guide for FY 2017-18 

Income Tax Calculation:

As far as possible I would use the format used in filing income tax returns so that its more helpful for everyone.

We first calculate the total income for the financial year (FY 2017-18)

  • Income from Salary (April to July 2017) – Rs 2,50,000
  • Income from Pension (August’17 to March’18) – Rs 1,49,600 (Rs 18,700 * 8)
  • Income from Interest on Fixed Deposit – Rs 1,15,000

Total Income = Rs 5,14,600

Download: Income Tax Calculator for FY 2017-18 [AY 2018-19]

The table below calculates the income tax:

Income Tax Calculation for Senior Citizen with Salary, Pension and Interest Income - FY 2017-18

Income Tax Calculation for Senior Citizen with Salary, Pension and Interest Income – FY 2017-18

The total tax comes out to be Rs 3,327 which is just 0.65% of his income. This unfortunately is higher than what he would have paid last financial year!

Read to know more: Senior citizens with income between Rs 3.5 lakhs to 4 lakhs would pay more tax in FY 2017-18

Recommendation to Save more Tax:

Disclaimer: The recommendation is made based on limited information we have!

As he pays very little tax there is nothing much to worry. He could have paid even lesser if he could take following tax benefits:

  1. Sec 80GG in case you live on rent and do not own a house (deduction up to Rs 60,000)
  2. Section 80D for Health Insurance Premium

Also for senior citizens SCSS is one of the best investments for regular income. So he choose the right investment for tax saving.

Also Read: Best Tax Saving Investments u/s 80C

Let me know if this was helpful and you have any other suggestions!

Calculate Income Tax for Senior Citizen with Salary & Pension and Interest Income

Calculate Income Tax for Senior Citizen with Salary & Pension and Interest Income



5 thoughts on “How to Calculate Income Tax for Senior Citizen with Salary, Pension & Interest Income?

  1. J.DORAIKANNU says:

    I am a senior citizen and also apgovt pensioner.Retired on 30/11/2017.My salary income plus pension for FY2017-2018 881855-82271(Deductions)-799580Totalincoome.HOW MUCH TAX I WANT TO BE PAID? Kindly explain sir

    • For FY 2017-18 your tax including education cess would be Rs 72,013 (assuming you are senior citizen and net taxable income as stated by you is Rs 7,99,580 .

  2. Hira lal sharma says:

    I m 62 yrs pensioner.
    I m getting rs 30208 as gross pension monthly and there is deduction of rs 4266 of advance commuted .
    Is amount 4266 is taxable or exemptable????

  3. Yogendra singh says:

    If we added arears of pention in present income it will comes in range of 10% s. charge .how it reduced sir . I am a sr citizen

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