ITR 2026: Key Tax Deductions Pensioners Must Know Before Filing

While everybody is keeping their documents ready for the ITR fillings for the 2026-27 assessment year, let’s talk about the tax deductions for pensioners. Do they have any benefits? What should they know before filing the tax.

A retired employee’s pension is considered income under the terms of the Act and is subject to taxation under the ‘Salaries’ category. Thus, according to the sources, pensioners are entitled to the standard deduction under Section 16(ia), which is Rs. 50,000 under the old tax system and Rs. 75,000 under the new tax regime.

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Only the pension drawn by the retired employee themselves is subject to this standard deduction. When dependents get a family pension after the employee’s demise, it is categorized and taxed as ‘Income from Other Sources,’ which means it qualifies for a different, lesser deduction, that is, one third of the pension or Rs. 15,000, whichever is less.

According to some reports, it is highlighted that, while filing ITR, pensioners must check their deductions and also consult a CA to understand the old and new tax regime. Instead of presuming that one regime is inherently superior, retirees should consider their income profile, deductions and exemptions before choosing between the old and new tax regimes.

(Disclaimer: Given the input is on an information basis, please seek professional advice.)