How to File Income Tax Return for Pensioners - FY 2024-25 (AY 2025-26)

This ultimate guide explains how senior citizens can file income tax returns for pension income in FY 2024-25 (AY 2025-26). Key details include: Sep 15 deadline (Dec 31 with penalty), applicable forms (ITR-1 for pension-only income; ITR-2 for additional sources), and exclusive tax benefits like Rs. 50,000 deduction on interest income (Section 80TTB) and higher exemption limits. The process involves declaring pension/other income, claiming deductions, and e-filing via the income tax portal. Required documents include Form 16/16A, bank statements, and pension details.
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2 min
15 August 2025

Under the Income Tax Act, pensions are treated as income under the head “Salaries”. Therefore, pensioners whose annual pension income is above the basic exemption threshold must file an income tax return. For most individuals, the appropriate form to use is ITR-1 (Sahaj), though the choice may vary depending on additional income sources. The process has been made simple, as pensioners can file their returns either through the online portal or by submitting an offline return. Filing income tax returns on time ensures compliance with tax rules and allows pensioners to claim eligible deductions and exemptions. In the following sections, you will find details on taxation of pension income, the step-by-step filing process, and a simplified overview of the ITR form for pensioners.

Tax on pension income

Pension received after retirement is classified into two types: commuted pension and uncommuted pension.

  • Commuted pension is a lump sum amount that a pensioner may choose to receive in advance by giving up a part of their future monthly pension. This provides an upfront payout of a fixed portion of the pension.

  • Uncommuted pension is the regular monthly pension received by the retiree, which continues over time without being converted into a lump sum.

For example, if a person opts to take 15% of their pension as a lump sum upfront, that part is considered commuted pension, while the remaining 85% received monthly will be the uncommuted pension.

Taxability of pension

Particulars

Uncommuted pension

Commuted or lump sum pension

Private sector employees

Fully taxable as salary

Partially exempt*

Government employees

Fully taxable as salary

Fully exempt

 

Note on Partial Exemption for Private Sector Employees:

  • If gratuity is received: 1/3rd of commuted pension is exempt.

  • If no gratuity is received: 1/2 of commuted pension is exempt.

Thus, while uncommuted pension is always taxable as salary, the commuted portion enjoys tax relief depending on whether the individual worked in the government or private sector, and whether gratuity was received. Pensioners must carefully calculate taxable and exempt amounts while preparing their returns.

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How to file income tax returns for pensioners in India?

Filing income tax returns for pensioners can be done conveniently through the Income Tax e-filing portal. The steps are as follows:

    Step 1: Visit the official Income Tax e-filing website and log in using your user ID and password.
    Step 2: Go to the “e-File” tab and choose “Income Tax Returns” from the options.
    Step 3: Click on “File Income Tax Return” to begin the process.
    Step 4: Select the Assessment Year and filing mode, then click on “Continue”.
    Step 5: Choose “Start New Filing” if you don’t have a pre-filled return, or “Resume Filing” if you do.
    Step 6: Select your taxpayer status (for most pensioners, it will be “Individual”) and then select the ITR-1 form, which is applicable for salaried and pension income.
    Step 7: Once the form loads, review the required documents list and click “Let’s Get Started”.
    Step 8: Confirm your income sources by checking the relevant boxes.
    Step 9: Select whether you want to file under the old tax regime or the new one.
    Step 10: Review and edit the details in each section before moving forward.
    Step 11: After completing all sections, click “Proceed”.
    Step 12: If you have tax dues, choose to “Pay Now” or “Pay Later”.
    Step 13: On making payment, a confirmation message will be displayed.
    Step 14: Return to filing and click “Preview Return” to check your details.
    Step 15: Tick the declaration box and, if applicable, provide TRP details. Then select “Proceed to Preview”.
    Step 16: Click on “Validation”. Correct any errors that may appear.
    Step 17: Move to verification. You can select “e-Verify Now”, “e-Verify Later”, or send a signed ITR-V to the department. e-Verification is recommended for faster processing.
    Step 18: Once complete, a success message will confirm your ITR filing and verification.

Important point: Since August 2022, taxpayers must verify their return within 30 days of filing, failing which the ITR will not be considered valid.

Maximising tax savings

Remember it's not just pension income or rental income that could affect your tax calculations, but also income from investments including the interests from savings account, fixed deposits or post-office deposits. Apart from these, if you have a joint home loan on a rented-out property, you can also claim deductions on the repayment.

In addition, certain financial products you keep or invest in will also help. Pensioners can claim deductions under Section 80C for investments in LIC, PPF, NPS and tax saver FDs. They can also save taxes under Section 80D for paying health insurance premiums.

While maximising tax deductions through various investment instruments, many pensioners also explore property ownership as a long-term wealth building strategy. If you're planning to purchase a home and need financing support, check your eligibility for a home loan from Bajaj Finserv with loan amounts up to Rs. 15 Crore* and flexible tenures up to 32 years. You may already be eligible, find out by entering your mobile number and OTP.

Just as filing ITR requires careful planning and documentation, securing your family's future through property ownership needs similar attention to detail. If you're considering purchasing a home for your family or as an investment, explore competitive home loan options from Bajaj Finserv with attractive interest rates starting from 7.45%* p.a You may already be eligible, check your offers by entering your mobile number and OTP.

Summary of pensioner’s ITR form

The pensioner’s ITR form is structured into several sections, each requiring careful attention.

  • Personal information: This section fetches details from your e-filing profile, though you can update certain fields if needed.

  • Gross total income: Here, your salary and pension income details will appear. If you are reporting a family pension, select “Family Pension” under “Income from Other Sources”.

  • Deductions: In this section, you must declare and verify deductions available under the Income Tax Act, such as investments and medical insurance premiums.

  • Tax paid: This part captures details of advance tax, TDS, TCS, and any self-assessment tax already paid during the year.

  • Tax liability: The final section computes the overall tax payable or refund due, based on your declared income and deductions.

By carefully reviewing each part of the form, pensioners can ensure accuracy and avoid common filing mistakes.

Conclusion

Filing income tax returns is an important responsibility for pensioners whose income crosses the basic exemption limit. The process is straightforward if done online, with clear sections guiding you through income, deductions, and tax calculations. Filing on time not only avoids last-minute stress but also prevents penalties for late submission. Pensioners are advised to keep all necessary documents ready before starting the process, choose the correct form, and complete e-verification within the specified deadline for a smooth and hassle-free experience.

As you ensure tax compliance through proper ITR filing, consider securing your financial future through strategic property investments. Whether you're looking to buy your dream retirement home or invest in real estate, explore home financing solutions with Bajaj Finserv that offer competitive rates and hassle-free processing. You may already be eligible, check your offers by entering your mobile number and OTP.

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Frequently asked questions

Can a pensioner file ITR without Form 16?
Yes, a pensioner can file ITR without Form 16. They would require bank statements that show pension credits, TDS certificates (if available), and other income details. Form 26AS can be used for cross-verification of TDS details.
Is it mandatory to file ITR for pensioners?
Yes, if a pensioner's annual income exceeds the exemption limit, or possesses foreign assets, or is a signing authority in a foreign bank account, it is mandatory to file ITR.
How do I file a tax return for a pensioner?
A pensioner can file a tax return by downloading appropriate ITR forms from the Income Tax Department's website, fill in accurate details from bank statements, Form 26AS, and financial records, and verify it digitally or through ITR-V form.
What is the ITR form for retirees?
Pensioners or retirees generally use ITR-1 (Sahaj) or ITR-2 to file their tax returns, depending on their income sources. ITR-1 is used by pensioners who earn income from salary/pension, one house property, and other sources, while ITR-2 is for those with additional incomes.
Do pensioners need to file income tax returns?

Yes. Pensioners must file returns if their total annual income, including pension and any other earnings, exceeds the exemption limit set by the Income Tax Department. Filing ensures compliance with tax laws and allows pensioners to claim available deductions.

Can pensioners file their income tax returns online?

Yes, pensioners can submit their returns online through the official e-filing portal of the Income Tax Department. This digital process is convenient, user-friendly, and secure. Pensioners can log in, fill in details, pay taxes (if due), and complete verification without visiting any tax office.

Just like filing ITR online offers convenience and security, exploring home loan options digitally can simplify your property purchase journey. Check your eligibility for a home loan from Bajaj Finserv with instant approval processes and competitive interest rates. You may already be eligible, find out by entering your mobile number and OTP.

How can pensioners claim deductions while filing income tax returns?

Pensioners can claim deductions under different sections such as Section 80C (investments in PPF, NSC, etc.), Section 80D (medical insurance premiums), and Section 80TTB (interest on savings or deposits). These deductions are available under the old tax regime. The choice between old and new regime affects the type of deductions available.

Is standard deduction applicable on pension income?

Yes. Since pension is treated as salary income, standard deduction is allowed. Under the old regime, the deduction is Rs. 50,000, while under the new regime, it is Rs. 75,000. Pensioners can claim this directly when filing their returns to reduce their taxable income.

While standard deductions help reduce your taxable income, strategic property investments can provide additional income streams and tax benefits. If you're considering home purchase, explore flexible home loan options from Bajaj Finserv with EMIs starting as low as Rs. 677/lakh*. You may already be eligible, check your offers by entering your mobile number and OTP.

Where can I declare family pension in my ITR?

Family pension must be reported under “Income from Other Sources” and not under “Salaries”. It qualifies for a deduction under Section 57, where the lower of Rs. 15,000 or one-third of the pension amount is exempt from tax. The remaining portion will be added to the total income of the recipient.

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