Income Tax Bill 2025: Here's How Provisions, Sections For Senior Citizens Have Been Covered Under ITB

The Income Tax Bill 2025 (ITB), recently introduced in the Lok Sabha, is India’s new vision of making tax law simpler for the citizens without introducing any new taxes. It doesn’t bring any major shake-ups, however, ITB is all about bringing a fresh structure to income tax laws by introducing terms like ‘Tax-year’ instead of ‘Assessment Year’ and consolidating different provisions into a single and more taxpayer-friendly framework.

For senior citizens, there’s good news; the tax benefits they currently enjoy remain intact but the section has changed. How? Let’s understand.

Also Read: RBI Aims To Inject Liquidity To Offset Tax Outflows: How It Will Affect the Public

How Does ITB Affect Senior Citizens?

The Bill defines a ‘senior citizen’ as an individual resident in India who is of the age of sixty years or more at any time during the relevant tax year.

Right now, under the existing Income Tax Act 1961, senior citizens can claim a tax deduction of up to Rs 50,000 on interest earned from their bank and post office deposits under Section 80TTB. For other taxpayers, namely general citizens and Hindu undivided families (HUFs), the deduction is much lower, just Rs 10,000 under Section 80TTA, and only for interest earned from savings accounts.

In the ITB 2025, however, these sections have been scrapped and merged into a new ‘Section 153’. But there’s nothing to worry about since this doesn’t mean senior citizens lose their benefits. They can still claim the same Rs 50,000 deduction under the said section for interest income earned from savings accounts and time deposits in banks, post offices, and cooperative banks.

For regular taxpayers and HUFs, the Rs 10,000 limit remains and only applies to interest from savings accounts. Like before, there will be no deduction for interest earned from fixed deposits and recurring deposits unless you are a senior citizen.

Why This Change?

The government wants to make tax filing simpler. The Central Board of Direct Taxes (CBDT) says merging these sections eliminates confusion, making it easier to find everything in one place. Instead of flipping through multiple sections, taxpayers, especially senior citizens, can now see exactly what they’re eligible for under one heading.

The bill also clarifies what counts as a ‘time deposit.’ Essentially, this refers to money locked in for a fixed period, such as Fixed Deposits (FDs) and Senior Citizen Savings Scheme (SCSS) accounts. This ensures that senior citizens continue to benefit from their long-term savings.

Other Key Changes in ITB 2025

Besides simplifying tax benefits for senior citizens, the Bill further removes over 300 outdated provisions from the ITA 1961. Some of the popular sections like 80CCA (which allied deductions for investments in the National Savings Scheme) and Section 80CCF (related to long-term infrastructure bonds) have been omitted.

Moreover, the Bill further aims to simplify TDS and TCS regulations. It has suggested implementing TDS to more income sources, such as salaries, professional fees, interest income, and rent. Meanwhile, TDS will be charged on transactions like selling alcohol, minerals, scrap materials, high-end vehicles (prices above Rs 10 lakh), and foreign remittances exceeding Rs 7 lakh.