Father's Day 2026: How Senior Citizens Can Maximise Tax Savings In Old And New Regimes

Father’s day is a holiday entrenched in public memory as a day on which we appreciate our fathers for the sacrifices and hard work they have put in. For some it may involve grand and elaborate gestures, for others it may involve penning heartfelt notes of gratitude.

One way of expressing gratitude is helping your father navigate complex taxation and budgeting decisions. Senior citizens often struggle to stay updated with the latest provisions, changes and end up missing out on the potential taxation related benefits they are eligible for.

Leveraging the right tax-related provisions can help your father in getting a bigger retirement corpus as the Income Tax Act, 2025 has special provisions designed specifically for senior citizens. Thus, it is crucial to understand how these benefits apply depending on whether he opts for the old tax regime or the new tax regime.

Higher Basic Exemption Limits

Senior citizens are entitled to a higher basic tax exemption limit. Under the old tax regime, an individual below the age of sixty enjoys a basic exemption limit of Rs 2.5 lakh. However, if your father is a senior citizen between the ages of 60 and 80, this basic exemption limit increases to Rs 3 lakh under the old tax regime.

Additionally, for fathers aged 80 years and above, the exemption limit is increased. Notably, after the age of 80, taxpayers are categorised as super senior citizens and they are eligible for an exemption of Rs 5 lakh. However, this exemption is only provided under the old tax regime. Under the new tax regime, the basic exemption limit remains the same irrespective of age at Rs 4 lakh.

Interest Income Relief

Senior citizens are also eligible for relief provided on interest income. Post superannuation many fathers rely on the interest their fixed deposits and savings accounts generate. Section 80TTB of the I-T act makes senior citizens eligible to claim a deduction of up to Rs 50,000 on interest income earned from banks, post offices, or cooperative societies. However, this deduction can only be claimed under the old-tax regime. Notably, this is an upgrade from the regular Rs 10,000 deduction on savings account interest.  It is important to note that this deduction is exclusively available if your father files his taxes under the old tax regime and cannot be claimed under the new tax regime.

Healthcare and Medical Deductions

As the years roll, healthcare costs also increase but tax laws provide specific relief for these expenses. Under the old tax regime of the I-T act, Section 80D allows senior citizens to claim a higher deduction for health insurance premiums.

While regular taxpayers can only claim deductions up to Rs 25,000, senior citizens can claim deductions of up to Rs 50,000. If your father does not have health insurance, this limit can be used for routine medical expenses.

Additionally, the Section 80DDB provides a deduction of up to Rs 1 lakh for the medical treatment of specified illnesses. These health related deductions are only permitted under the old tax regime.Exemption From Advance TaxApart from deductions, the government also offers administrative relief for senior citizens. Regardless of whether they choose the old tax regime or the new tax regime, senior citizens are completely exempt from paying advance tax provided they do not have any income from a business or profession.

Regular taxpayers with a tax liability exceeding Rs 10,000 must pay advance tax in installments. However, senior citizens earning only pension, interest, and rental income can simply pay their self assessment tax at the time of filing their return without facing interest penalties.

Relief From Filing Income Tax Returns

If your father is aged above 75 years, Section 194P of the Income Tax Act exempts him from the hassle of filing an income tax return entirely. To be eligible, your father’s income has to come solely from a pension and interest, and both must be credited to the same specified bank account.

The bank will calculate his total income, apply the standard deduction of Rs 50,000 under the old tax regime or Rs 75,000 under the new tax regime, and deduct the necessary tax. This exemption is applicable under both the old tax regime and the new tax regime.

This Father's Day, take the time to read about these provisions and make sure that your father is making the most of them. Understanding the distinctions between the old tax regime and the new tax regime can help your father optimise his finances and enjoy a stress free retirement.