Taxable as Income from House Property

• Rent received by a senior citizen is taxed under the head “Income from House Property.”
  
• Standard 30% deduction is allowed for maintenance and repairs (Section 24).
• Property tax paid during the year is also deductible.
• Tax is levied on the net annual value after deductions.
• Even if rent is deposited into a senior citizen account, it remains taxable.

No Automatic Exemption for Rent

• Unlike interest income (which has a ₹50,000 exemption under Section 80TTB), rent income has no special exemption for senior citizens.
• Rent must be declared in the Income Tax Return (ITR).
• Normal income tax slabs, including senior-specific limits, apply.
• The basic exemption limit for senior citizens (60–79 years) is ₹3 lakh.
• For super senior citizens (80+), the limit is ₹5 lakh.

TDS on Rent Payments (Section 194-IB)

• If the tenant is an individual paying monthly rent exceeding ₹50,000, they must deduct TDS at 5%.
• Tenant needs not have a TAN; PAN is enough to comply.
• TDS certificate (Form 16C) must be issued to the senior citizen.
• Senior citizens should reconcile TDS with Form 26AS.
• Failure to reflect this in tax returns may lead to notices.

Advance Tax Applicability

• If the total tax liability exceeds ₹10,000 in a year, advance tax is applicable.
• Senior citizens not having business income are exempt from advance tax.
• Otherwise, they must pay tax in quarterly installments.
• Interest under Sections 234B and 234C applies for shortfall or late payment.
• It is advisable to estimate annual rental income in advance.

Tax Planning Tips

• Declare rental income clearly while filing ITR (usually ITR-1 or ITR-2).
• Maintain rent receipts, rental agreements, and tenant PAN details.
• Consider joint ownership to split income between spouses (if applicable).
• Explore Section 80C and 80D deductions to reduce taxable income.
• Consult a tax advisor if income from multiple properties is involved.