Budget 2026 explainer: How the new Form 15H rule simplifies tax filing for senior citizens

The Union Budget 2026 has introduced a procedural reform that could significantly ease tax compliance for senior citizens who earn interest income from bonds, debentures and other securities held in demat form. FM Nirmala Sitharaman announced that senior citizens will now be allowed to submit Form 15H just once through their depository — either NSDL or CDSL — instead of filing it separately with each issuer.

The move is aimed at simplifying compliance for elderly investors who often hold interest-bearing securities across multiple companies. By centralising the acceptance and transmission of Form 15H, the government hopes to reduce paperwork, minimise errors and lower the risk of unintended tax deductions at source (TDS).

Why Form 15H matters for senior citizens

Form 15H is a self-declaration that resident individuals aged 60 years and above can submit if their total taxable income for the year is below the basic exemption limit. Once submitted, it instructs the payer not to deduct TDS on interest income.
Senior citizens commonly use Form 15H for interest earned from bank fixed deposits, corporate bonds and debentures, non-convertible debentures (NCDs), municipal bonds and other notified interest-bearing securities, especially those held in demat form. For retirees who rely on fixed-income investments for regular cash flows, avoiding unnecessary TDS is crucial for managing liquidity.

What exactly changes in Budget 2026

Until now, investors were required to submit Form 15H individually to every bank, company or bond issuer from whom they earned interest. This often meant multiple submissions each financial year, sometimes across dozens of issuers.
Under the new Budget proposal, senior citizens can submit Form 15H once with their depository. The depository will then electronically share the declaration with all relevant issuers where the investor holds demat securities. Importantly, this reform is focused on demat-held instruments and does not extend to traditional bank deposits.

How this affects senior citizens in practice

The most immediate benefit is the shift from multiple filings to a single submission. Elderly investors who hold bonds or debentures issued by several companies will no longer need to track different deadlines or worry about missing out on one issuer.
The change also lowers the risk of unintended TDS deductions. In practice, many retirees face tax cuts simply because they forgot to submit Form 15H to one issuer, even though their income is below the taxable limit. A centralised system reduces such gaps.

Market participants have welcomed the move. Vipin Upadhyay, Partner, King Stubb & Kasiva, Advocates and Attorneys, said: “Budget 2026 introduces a welcome compliance relief for senior citizens and small investors by simplifying the process of submitting Form 15G and Form 15H. Investors earning dividend or interest income from securities of multiple companies will now be able to file a single declaration with the depository, instead of submitting separate forms to each company or issuer. This addresses a long-standing procedural burden that often led to inadvertent TDS deductions and subsequent refund claims, particularly impacting senior citizens who rely on interest and dividend income for regular cash flows. The move aligns with the government’s broader objective of digitisation and ease of compliance, ensuring that tax benefits reach eligible taxpayers more efficiently while reducing administrative friction across the investment ecosystem.”

Vishal Goenka, co-founder of IndiaBonds.com, said streamlining Form 15G and 15H filings will particularly benefit retail bond investors, among whom senior citizens form a large share. Akshay Mehrotra, MD and Group CEO of Fibe, added that the reform reduces operational friction and strengthens the digital financial ecosystem for both investors and companies.
What does not change

The Budget does not alter eligibility conditions for Form 15H. The age requirement of 60 years, the income threshold and existing TDS rules remain unchanged. If a senior citizen’s taxable income exceeds the exemption limit, TDS will continue to apply even under the new centralised system.

What are tax slabs for senior citizens

For senior citizens aged 60–79 under the Old Tax Regime for FY 2025–26, income up to Rs 3 lakh is exempt from tax. Beyond this, tax is levied at 5% on income between Rs 3–5 lakh, 20% on Rs 5–10 lakh, and 30% on income exceeding ₹10 lakh. Super senior citizens aged 80 and above enjoy a higher basic exemption of ₹5 lakh. The New Tax Regime, however, follows a separate slab structure.

Old Tax Regime (FY 2025–26)

Age 60–79 (Senior Citizens):
Up to Rs 3,00,000: Nil
Rs 3,00,001 – Rs 5,00,000: 5%
Rs 5,00,001 – Rs 10,00,000: 20%
Above Rs 10,00,000: 30%

Age 80+ (Super Senior Citizens):
Up to Rs 5,00,000: Nil (higher basic exemption)
Income above Rs 5 lakh is taxed at the standard slab rates of 5%, 20% and 30%, applied after the enhanced exemption threshold.

Key tax benefits for senior citizens

Higher basic exemption: Senior citizens get a basic exemption of Rs 3 lakh, which is Rs 50,000 higher than the Rs 2.5 lakh limit for non-seniors. Super senior citizens benefit even more, with a Rs 5 lakh exemption — Rs 2.5 lakh higher than others — under the old regime.

Section 80TTB deduction: Seniors can claim up to Rs 1 lakh as deduction on interest income earned from savings accounts, fixed deposits with banks, and post office deposits. This limit was raised from Rs 50,000 in Budget 2025.

Section 80D deduction: A higher deduction of up to Rs 50,000 is available for health insurance premiums or medical expenses incurred by senior citizens.

New Tax Regime (FY2026–27)

The New Tax Regime offers lower tax rates across slabs but generally does not provide higher basic exemption limits specifically for senior citizens, unless certain deductions such as Sections 80TTB or 80D are claimed where applicable.

Income Tax Slabs for FY 2025-26 (AY 2026-27)    Income Tax Rates for FY 2025-26 (AY 2026-27)
Up to Rs. 4 lakh    Nil
Rs. 4 lakh to Rs. 8 lakh    5%
Rs. 8 lakh to Rs. 12 lakh    10%
Rs. 12 lakh to Rs. 16 lakh    15%
Rs. 16 lakh to Rs. 20 lakh    20%
Rs. 20 lakh to Rs. 24 lakh    25%
Above Rs. 24 lakh    30%