How To File Income Tax Return for Pensioners?

Filing your income tax returns can feel overwhelming even for retirees who have to keep up with the ever-changing tax codes. Since pension is calculated under the head “Income from Salaries”  according to the Income Tax Act (1961), if the received amount is above the exemption amount, pensioners are liable to file their income tax return.

Post-retirement, your financial structure changes significantly. In such cases, it becomes crucial to save taxes efficiently. Many pensioners file their tax returns unaware of the deductions and benefits they are entitled to, missing out on tax-saving opportunities. 

This blog article talks about the applicable deductions to avail when filing ITR for pensioners. Before that, we dive into the documents required and applicable forms during the ITR process. So, let’s get started with the journey of filing your ITR as a pensioner and get your confidence to make this process a little less stressful.

Process of Filing ITR for Pensioners

The process of filing an income tax return can be done online through the following steps:

Step 1: Log in to the income tax e-filing website.

Step 2: Navigate to the “e-File” tab and select the “Income Tax Returns” option from the drop-down menu.

Step 3: Click on “File income tax return” 

Step 4: Choose your Assessment Year and select online filing mode. Click on continue.

Step 5: If your ITR is pre-filled, click on “Resume Filing”; if not, click on “Start New Filing”.

Step 6: Choose your applicant status and click on “Continue”. Select the ITR 1 form from the drop-down menu on the right side.

Step 7: After the page has loaded, look at the documents required and click on “Let’s Get Started”.

Step 8: Select applicable checkboxes and click on “Continue”. 

Step 9: Select the tax regime (old or new) which you want to follow.

Step 10: Review and correct the section data and move to the next page by clicking on “Continue”.

Step 11: After entering the details of income and deductions in the sections, click on “Proceed”.

Step 12: Your outstanding tax liability (if any) will be displayed on the screen. You can choose either “Pay Now” or “Pay Later”.

Step 13: If you choose to Pay Now, you will be redirected to select a preferred bank and will be notified with a confirmation message after the payment is processed.

Step 14: Go to the “Back To Return Filing” button. Here you will also be able to preview your ITR.

Step 15: When the “Preview and Submit Your Return” page appears, tick the declaration box. If applicable, fill in your TRP information or leave it blank if it’s not relevant. Then click “Proceed to Preview” to review all details.

Step 16: Select “Proceed to Validation” next. Should there be any discrepancies in your return, correct them by going back to the relevant section.

Step 17: Ensure all data is accurate and then click “Proceed to Verification”.

Step 18: On the “Complete your Verification” page, you will have the options to “e-Verify Now”, “e-Verify Later”, or “Verify via ITR-V”. It is advisable to choose “e-Verify Now” and click “Continue”.

Step 19: A confirmation message will indicate that your ITR filing and verification are successfully completed.

Know More About Filing Income Tax Returns

Requirements for the ITR

Here are some of the key aspects to check twice before filing your Income Tax Return as a pensioner.

Form

ITR 1- Sahaj

This form is applicable to all individuals with a salary-based income. Since pension is calculated under the income head, the ITR form for a retired person will be ITR 1- Sahaj.

Head of Income

As stated above, pension is calculated under the head Income from Salaries.

Documents Required

• Form 16 and Form 16A: These forms detail your salary breakdown and tax deducted during the financial year, provided by your company’s HR at year-end.
• 26 AS (For Documented Income Verification): This statement, which can be accessed on the Income Tax portal under the ‘Services’ tab, reflects TDS and TCS information. It’s a supplementary document used to confirm TDS deductions on your salary and is optional.
• For deductions: Your PAN number is necessary if claiming deductions, along with other pertinent details such as the amount, date of payment, and documents like donation receipts, insurance payments, and mutual fund investment slips.

Know in Detail About Documents Required for ITR Filing

Standard Deduction

All pensioners filing their Income Tax Returns and above the age of 60 years, are entitled to a standard deduction of up to ₹50,000. This can be claimed during the filing of the ITR for senior citizens.

For other pensioners, a ₹40,000 deduction is allowed from the total salary income. In the case of a family pension, ₹15,000 is allowed as a deduction during filing ITR for a pensioner.

How To Save on Tax as a Post-Retiree?

You can claim the deductions under the following sections if applicable:

Tax Saving Investments

Under the old tax regime, your investment amount in certain saving schemes like the National Pension Scheme, Senior Citizen’s Saving Scheme and Public Provident Fund are eligible for deduction under Section 80C of the Income Tax Act, 1961. The maximum deduction under this section is ₹1.5 lakhs.

Medical Insurance Premium

If a senior citizen is in the family, their medical insurance premium can reduce the tax liability up to ₹50,000 annually. This deduction is claimed under Section 80D.

Hospital Expenses

As a senior citizen, you can avail deduction of up to ₹1 lakh for the medical expenses incurred for you or your dependents (spouse, children etc.). This deduction is applicable for serious diseases like cancer or AIDs under Section 80DDB.

Deduction on Interest from Savings

If you hold any savings as a senior citizen in any bank, cooperative society or post office, your interest earned on these savings is tax-free up to ₹50,000 according to Section 80 TTB.

Read More About Section 80.

Wrapping Up

 By understanding the forms, deductions, and processes outlined in this guide, you can navigate tax season with greater ease and confidence, ensuring you make the most of every tax benefit available to you. Remember, timely filing of your ITR keeps you compliant and helps manage your finances better post-retirement.

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