BT Explainer: ITR filing rules for pensioners -- who must file returns, tax slabs, deductions, deadlines

Many retirees assume that filing Income Tax Returns (ITR) becomes unnecessary after retirement, especially once regular salary income stops. However, pension income remains taxable in most cases and pensioners may still be required to file ITR depending on their annual income, tax regime, deductions claimed and certain financial transactions during the year.

Apart from meeting compliance requirements, filing returns can help pensioners claim tax refunds, accurately report pension and interest income, maintain financial records and carry forward eligible losses. For Assessment Year (AY) 2026–27, pensioners who generally file ITR-1 can submit returns until July 31, 2026. Those missing the deadline can still file a belated return until December 31, 2026, although penalties may apply.

The Income Tax Department has already enabled online filing and Excel utilities for ITR-1 and ITR-4, allowing taxpayers to begin filing returns for income earned during FY 2025-26.

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Tax slabs for senior citizens

Senior citizens aged 60 years and above but below 80 years continue to receive different tax treatment depending on whether they choose the old or new tax regime.

Under the old tax regime, income up to ₹3 lakh is exempt. Income between ₹3 lakh and ₹5 lakh attracts 5% tax, income from ₹5 lakh to ₹10 lakh is taxed at 20%, while income above ₹10 lakh attracts 30% tax.

Under the new tax regime, no tax is payable up to ₹4 lakh. Income between ₹4 lakh and ₹8 lakh is taxed at 5%, ₹8 lakh–₹12 lakh at 10%, ₹12 lakh–₹16 lakh at 15%, ₹16 lakh–₹20 lakh at 20%, ₹20 lakh–₹24 lakh at 25%, while income above ₹24 lakh attracts a 30% tax rate.

The old regime provides a tax rebate of up to ₹12,500 for income up to ₹5 lakh, while under the new regime, a rebate of ₹60,000 is available for income up to ₹12 lakh, subject to conditions.

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Deductions pensioners can claim

Pensioners opting for the old tax regime can claim multiple deductions.

Under Section 80TTB, senior citizens can claim deductions up to ₹50,000 on interest income earned from savings accounts, fixed deposits, post office deposits and co-operative bank deposits.

Under Section 80D, senior citizens can claim deductions of up to ₹50,000 on health insurance premiums.

Under Section 80DDB, pensioners can claim up to ₹1 lakh for treatment expenses related to specified diseases.

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Eligible investments and expenses under Section 80C provisions continue to provide deductions up to ₹1.5 lakh, including life insurance premiums, provident fund contributions, National Savings Certificates (NSC), and housing loan principal repayment.

Pensioners can also claim a deduction of up to ₹2 lakh under Section 24(b) on housing loan interest for self-occupied property under the old regime.

Advance tax relief and ITR forms

Resident senior citizens who do not earn income from business or profession are exempt from paying advance tax under Section 207 of the Income Tax Act. Interest provisions under Sections 234B and 234C also do not apply in such cases.

As for forms, pensioners with income up to ₹50 lakh from pension, one house property and other sources usually file ITR-1, while those with capital gains, multiple properties or foreign assets may need ITR-2.

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