Special taxpayers and life situations · Tax Year 2025-26
ITR for pensioners: forms, deductions and tips
Pension is taxed as salary, with a standard deduction. Family pension is taxed as other income with its own deduction. Senior citizens get a higher exemption in the old regime and a savings interest deduction. See which ITR form to use and what to check.
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A pension is taxed as salary, so you get the standard deduction (₹50,000 in the old regime, ₹75,000 in the new regime on the 2025-26 rules). A family pension is taxed as income from other sources, with a deduction of the lower of one-third and ₹15,000 (old regime) or ₹25,000 (new regime). Most pensioners with simple income file ITR-1.
The figures are for the tax year 2025-26 under the Income-tax Act, 1961.
How the main income types are taxed
Income | Head | Notes |
|---|---|---|
Pension from a former employer | Salary | Standard deduction applies |
Family pension | Other sources | Deduction: lower of one-third and ₹15,000 (old) or ₹25,000 (new) |
Commuted pension | Exempt in full or in part | Section 10(10A): fully exempt for Government employees; for others one-third of the full commuted value is exempt if you also receive gratuity, one-half if you do not |
Accumulated PF balance | TDS under 192A (392(7) under the 2025 Act) | Taxable when withdrawn before five years of continuous service |
Interest on savings and FDs | Other sources | Old regime: 80TTB up to ₹50,000 |
Rent from a house | House property | 30% standard deduction |
Benefits for senior citizens
These apply in the old regime:
- Higher basic exemption: ₹3,00,000 for ages 60 to 79 and ₹5,00,000 for age 80 and above. Below 60 it is ₹2,50,000.
- Interest deduction: section 80TTB up to ₹50,000 on savings and deposit interest.
- Health insurance: section 80D up to ₹50,000 for yourself if a senior citizen is covered, and up to ₹50,000 more for senior citizen parents, with a total cap of ₹1,00,000.
In the new regime the slabs are the same for every age, and these extras do not apply. The rebate in the new regime makes income up to ₹12,00,000 tax-free. Compare both regimes. See old vs new tax regime, section 80TTA and 80TTB and rebate under section 87A.
Do you have to file?
If your income is above the basic exemption limit, yes. Even below it, filing is useful to claim a refund of TDS. There is one exception for specified senior citizens (section 194P of the 1961 Act): a resident aged 75 or more at any time in the year, whose only income is pension and interest, with the pension paid into and the interest earned from the same specified bank, can give that bank a declaration (Form 12BBA, now Form 125). The bank then works out the tax, including deductions and the rebate, and deducts it, and the person need not file a return for that year. Under the Income-tax Act, 2025 this deduction falls under section 393(1), Table S.No. 8(iii).
Read who must file an income tax return.
Which ITR form
Your income | Form |
|---|---|
Pension, family pension, interest, one house property, total income up to ₹50 lakh, resident | ITR-1 |
Capital gains beyond the ITR-1 limit, more than one house property, foreign assets | ITR-2 |
Business or professional income too | ITR-3 or ITR-4 |
See which ITR form should I file.
Checks that matter for pensioners
- Pension TDS. Your pension payer (bank or pension office) deducts TDS as on salary. Check it in Form 26AS or Form 168.
- Interest. Banks report interest in AIS. Include all savings, FD and RD interest.
- Two sources of pension. If you get pension from two payers, add both. The standard deduction is allowed once, on the total.
- Advance tax. A resident aged 60 or more with no income from business or profession does not have to pay advance tax. Others pay advance tax on the schedule when the tax for the year is ₹10,000 or more.
- E-verify within 30 days. Aadhaar OTP is easiest. See e-verify with Aadhaar OTP.
Filing for a parent
Many people file for an elderly parent. Each person files under their own PAN. In TaxCare you can add a parent as a family member and file for them separately. The parent must still e-verify their own return; you can help them do it with the Aadhaar OTP sent to their Aadhaar-linked mobile.
How TaxCare helps
TaxCare brings pension, TDS and interest from the portal, applies the senior-citizen exemption, 80TTB and 80D in the old regime, and compares both regimes. You can add family members and file for each. A Tax Expert is available if the case is not simple. See Tax Experts.
This guide gives general information and is not professional tax advice.
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