How to Calculate Income Tax for Senior Citizen with Salary, Pension & Interest Income? (FY 2019-20)

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 would retire on 31 Jul 2019.  My income from Apr 19 to Jul 19 is Rs. 2,50,000.  Thereafter I would get pension @ Rs. 18,700 per month.  As on 31 Mar 20 estimate interest on my FDs is Rs. 2,00,000. 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 2019-20 

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 2019-20)

  • Income from Salary (April to July 2019) – Rs 4,00,000
  • Income from Pension (August’19 to March’20) – Rs 1,49,600 (Rs 18,700 * 8)
  • Income from Interest on Fixed Deposit – Rs 2,00,000

Total Income = Rs 7,49,600

Download: Income Tax Calculator for FY 2019-20 [AY 2020-21]

The table below calculates the income tax:

HeaderAmount (RS.)Remarks (FY 2019-20)
Income from Salary5,49,600Pension Income is considered as Salary Income
Income from Other Sources2,00,000Interest income is considered as income from other sources
Total Income7,49,600 
Tax Saving/Exemption Sections
Standard Deduction50,000Applicable for Pension/Salary Income
Sec 80TTB (FD Interest Exemption)50,000Introduced in Budget 2018 for Senior Citizens
Senior Citizen Saving Scheme1,50,000Even if you invest Rs 2 Lakhs in SCSS the tax deduction would be limited to Rs 1.5 Lakhs only u/s 80C
Total Deduction2,50,000 
Taxable Income4,99,600Total Income – Total Deduction
Tax Exemption Limit for Senior Citizens3,00,000 
Net Taxable Income1,99,600Taxable Income – Exemption Limit
Tax @ 5%9,980The tax slab comes at 5%
Tax Rebate up to Rs 12,500 u/s 87A -9,980The Taxable income is less than Rs 5 lakhs and hence eligible for Tax Refund u/s 87A
Net Income Tax0Tax – Tax Rebate
Health & Education Cess @ 4%0Cess increased to 4% in Budget 2018
Total Income Tax Payable (including cess)0No Tax is Payable

The total tax comes out to be NIL because of the increase in tax rebate u/s 87A and increase in Standard Deduction on Pension Income in Budget 2019. Additionally Section 80TTB (exemption up to Rs 50,000 on interest income) introduced in Budget 2018 helps further.

Also Read: 5 Key changes in Income Tax Rules from April 1, 2019 that you must Know

Recommendation to Save Tax if Income Increases:

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

As he pays NO tax there is nothing much to worry. He could use following tax benefits in case the income increases:

  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

He is also eligible to submit Form 15H against his fixed deposits to prevent any TDS (Learn: How & when to Fill Form 15H?).

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

21 thoughts on “How to Calculate Income Tax for Senior Citizen with Salary, Pension & Interest Income? (FY 2019-20)

  1. For a super senior without health insurance coverage, can he avail Rs.30,000/- deduction U/s 80D towards annual Medical expenses besides standard deduction of 40,000 ?

    Regarding the arrears paid for past years, and for claim relief U/s 89(i) this year, why should the government insist the seniors/ super senior pensioners to file the data and compute the Form 10E? Since it is a cumbersome process of searching for respective data in bank passbook, the pension disbursing banks can do it appropriately and apply TDS. For a salaried employee in service, the process is done by the Finance department but for pensioners, it is not easy. We have to wait for the disbursing bank to send us the year-wise breakup of arrears paid totally for 32 months.

    If the Fin Min is considering to increase the 7th CPC factor from 2.57 to 3.68, then pensioners will get a lumpsum arrears this year for corresponding previous years. If so how to go about Form 10E calculation for the last 3 years?

  2. S RAJASEKARAN says:

    Dear Amit,

    I am NRI having both NRE and NRO accounts. I did not file IT return, although I would have got TDS reimbursements on my NRO account saving bank interest and FD interest, if I have filed

    I received a compliant notice which had the following

    1. Queries on my NRE account where FDs matured and I started a new FD after encashing. Why a query on NRE account is raised?
    2. On my NRO account also, I did not renew a matured FD- Encashed it and opened a new FD. There are queries regarding the same – why

    I replied through Compliance Portal and have not received any acknowledgment or reply – Can I assume that it is closed?

    Please advise
    Thanks,
    Rajasekaran

    • Its always good practice to file your returns. So do so from this year. Why you got notice is because income tax department is actively sending notices to people who they think should have file their returns but have not done so.

  3. N.R.Ranganathan says:

    My DOB is 10-05-1938, Can i be considered as super senior citizen for the FY 2018-2019 ( AY 2019-2020 )

    Thanks

  4. Dear sir, Iam senior citizen I have made a fixed deposit in bank December 2018 the amount is 991000, yearly interest is 71000 and I have made a Pradhan mantri vaya Vandana scheme in Lic the amount is 1000000, the yearly pension earned in same scheme is 83000 Kindly calculate my tax. And also my interest and pension amount how much TDs ????

  5. Dear sir,
    I shall retire on 28/02/2019.my birth date is 09/02/1959.thus I want to know that what would be income tax calculation factor for me either general or senior citizen.please send me details.
    Thanking.
    Your,s faithfully
    Jayprakash

  6. Sir,
    will I get relief from local travel expenses. if yes what is section?

  7. Dilip Kumar Bhuj says:

    Pl calculate my income tax.

    I would retire on 31 December 2018. My income from Apr 18 to December 18 is Rs. 7,50,000. Thereafter I would get pension @ Rs. 15,000 per month. As on 31 Mar 19 estimate interest on my FDs is Rs. 1,20,000. I have invested Rs. 15,00,000 in senior citizen scheme. Pl confirm how much income tax I have to Pay?

  8. Sir,
    I retired on 31st Dec 2017.I am getting income from mutual funds and deposits .How should I calculate income tax ?

  9. Nirmal Mukherjee says:

    Amit,I am an old 76 yrs and 100%handicapped,a pensioner of central govt.–pl.calculate my tax if applicable–I was getting basic rs8044/pm on 31.12.2015 but on 1.1.2016 it was basic rs21926[commutated[ rs 1600] and now basic rs 20370/pm .i have ni TD in bank/p.o etc .pl. calculate

    my tax how much payable[as three years arrear of pay increase will calculate in this month]

  10. My mother is a retired School Teacher. My father was also a School Teacher. He died on 24 Feb 2017. My mother get Rs. 275733 as a pension and also get Rs. 169198 as a Family pension in 2017-18 F.Y. She has a SCSS of Rs. 1200000. Her SCSS interest is 111600 in 2017-18 F.Y. She gets Rs. 305070 as a Fixed deposit interest in 2017-18 F.Y. Kindly calculate her Income tax in A.Y 208-19. Thanking you. sumit Das. ([email protected])

  11. Ramchandra V. Chaudhari says:

    I am retired on 30th April 2017 . My total income consist of salary of April and pension of eleven months. My question is whether entire amount of Gratuity and commuted pension is tax free. Shall I show amount of Gratuity, commuted pension ,provident fund in income tax return.

  12. Where we have to show PF amount and gratuity
    And where we have to show exemption. New gratuity act wef 29.3.2018. How we will get exemption from FY 2019 for pvt / PSU employee. Whether we have to pay IT for over 10 lakhs. Pls guide me. How it is acceptable.

  13. Dharmesh Talaviya says:

    I’m a senior citizen pensioner getting a monthly pension of 50,000/- of my late husband. While I’m getting a monthly pension of 20,000/- of my own; which makes our total yearly income of 8,40,000/- and I have made a FD of 1,00,000/-

    I want to know that how much income tax returns I need to pay? And what are the exemptions that I can have to reduce tax amount?

  14. 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 .

  15. 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????

  16. 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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