Income Tax for Senior Citizens in Kolkata: Pension, FD and Post Office Interest, Form 15H, SCSS and Filing Exemptions
Kolkata has one of India’s largest populations of retired people, many living on pension and interest from bank and post office deposits. Senior citizens (60 and above) and super senior citizens (80 and above) get special treatment: banks deduct TDS on deposit interest only above ₹1 lakh a year, a deduction of up to ₹50,000 on interest is available under the old regime, no advance tax is needed without business income, and people aged 75 or above whose only income is pension and interest from the same bank need not file a return if the bank deducts the tax. This guide explains which regime suits pensioners and how to avoid excess TDS.
Senior citizens at a glance
| Point | Rule |
|---|---|
| Senior citizen | Resident aged 60 or above during the year |
| Super senior citizen | Resident aged 80 or above |
| TDS threshold on bank and post office interest | ₹1 lakh a year per bank |
| Interest deduction (old regime) | Up to ₹50,000 on bank, cooperative bank and post office interest |
| Health insurance deduction (old regime) | Up to ₹50,000 |
| Advance tax | Not required if there is no business or professional income |
| Return filing exemption | Aged 75 or above, with only pension and interest from the same specified bank that deducts tax |
Basic exemption by regime
| Old regime | New regime | |
|---|---|---|
| Senior citizen (60 to 79) | ₹3 lakh | ₹4 lakh (same for all ages) |
| Super senior (80 and above) | ₹5 lakh | ₹4 lakh |
| Rebate | Income up to ₹5 lakh | Income up to ₹12 lakh |
| Standard deduction on pension | ₹50,000 | ₹75,000 |
For most pensioners with total income up to about ₹12.75 lakh, the new regime gives zero tax. The old regime helps mainly those with large health insurance premiums, medical expenses for super seniors, or investments.
Pension and family pension
- Pension from a former employer is taxed as salary, with the standard deduction. Commuted pension received as a lump sum is exempt within limits (fully for government employees).
- Family pension received by a widow or heirs is taxed as other income, with a deduction of one-third or ₹25,000 (new regime), whichever is lower; ₹15,000 under the old regime.
- Pension arrears received in one year for earlier years can get relief by filing Form 10E.
FD, post office and small savings interest
- Interest on bank FDs, Senior Citizens’ Savings Scheme (SCSS), Post Office Monthly Income Scheme and Time Deposits is taxable every year, whether you receive it or it is reinvested.
- NSC interest accrues each year and is taxable, though under the old regime it can be treated as reinvested.
- PPF interest and maturity are exempt.
Avoiding excess TDS: Form 15H
If your total tax on estimated income for the year is nil, give Form 15H to each bank and post office at the start of the year. The bank then does not deduct TDS. Most Kolkata pensioners with income under the rebate limit should file 15H. If you hold deposits in several banks, give it to each.
Should a senior file a return even if no tax is due?
- Yes, if TDS has been deducted and you want a refund.
- Yes, if income before deductions exceeds the basic exemption.
- Yes, if you have capital gains from selling shares, mutual funds or property.
- Only those aged 75 or above with pension and interest from the same specified bank, who give the bank a declaration, can skip filing.
Medical costs and insurance (old regime)
Health insurance premium for yourself and spouse is deductible up to ₹50,000 for seniors. A super senior without insurance can deduct medical expenses up to the same limit. Expenses for specified diseases also have a separate deduction.
Common situations in Kolkata families
- Interest from deposits in a joint account with a son or daughter: taxed in the hands of the first holder who owns the money.
- Rent from part of the house: taxed after the 30% standard deduction and municipal tax. See our KMC property tax guide.
- Selling the old family house: capital gains may be large; see capital gains on ancestral property in Kolkata.
A worked example for a Kolkata pensioner couple
Mr Sen, 72, receives a pension of ₹6 lakh and FD and SCSS interest of ₹4 lakh. Mrs Sen, 68, has interest of ₹2 lakh. Under the new regime, Mr Sen’s taxable income is ₹9.25 lakh after the ₹75,000 standard deduction, so no tax is payable because of the rebate; he should give Form 15H to his banks. Mrs Sen’s ₹2 lakh is also below every threshold. Under the old regime, Mr Sen would claim ₹50,000 standard deduction and ₹50,000 interest deduction, leaving ₹9 lakh and some tax. Here the new regime clearly wins.
Reverse mortgage and selling the family house
Many elderly Kolkata owners are asset-rich and cash-poor. Loan amounts received under a reverse mortgage are not income. If you sell the house instead, capital gains can be saved by buying a smaller house or investing in specified bonds within the time limits.
FAQs
What is the TDS threshold on FD interest for senior citizens?
₹1 lakh a year per bank.
Can a pensioner in Kolkata avoid TDS on FDs?
Yes, by submitting Form 15H if their total tax for the year is nil.
Do senior citizens need to pay advance tax?
Not if they have no business or professional income.
Is the new regime better for pensioners?
Often yes, because income up to ₹12 lakh after the standard deduction is tax-free under the rebate.
Is interest on SCSS taxable?
Yes. SCSS interest is taxable every year, though the deposit itself qualifies for deduction under the old regime.
TAXAJ files returns for pensioners and senior citizens in Kolkata, including Form 15H planning and refunds. Talk to our Kolkata team.
Last updated 11 November 2026. Sources: Income-tax law on senior citizens, including the deduction on interest, health insurance deductions, family pension, the exemption from advance tax and the filing exemption for those aged 75 or above; Finance Act, 2025 on the TDS threshold and new regime slabs. Interest rates on small savings change quarterly. General information only.
