Step 1
Scan and import the old photo into the photoshop. Next go to Image> Adjustments> Hue/ Saturation and adjust the Saturation slider to 40 and click OK.
Step 2
After you done that, go to Image> Levels. Set the input levels to 0, 1.00, 236 and click OK.
Step 3
Make a new layer. Choose a suitable color and spray around the photo. This is to hide the dirt surface of the photo. Adjust the Fill opacity to 90%, so that you can actually still see the bottom layer of the photo.
Step 4
It is time to erase that color that you've just sprayed around the photo. Use the Eraser tool and erase the highlighted red area as shown above.
Step 5
Use the same step as above to remove the color on the props.
Step 6
Once you've done erasing all the overlapping color, its time to touch up the photo. Use the Smudge tool to smudge around that person's face to give it a smoother feel/ look. You can adjust the strength to 40%, so that it doesn't look like over smudged.
Step 7
Use the Stamp tool to hide teared/ pealed surface of the photo. Simply hold the "Alt" key and click on the area that you want to copy from, then brush the area that you want to hide. It's that easy! Do the same process all over the photo and you're done!
Step 8
If you think that the photo looks dull, no worries, you can add colors on it. Simply create new layers(set the layer style to "overlay") and start coloring on the photo.
Download the PSD sample here : http://www.ramesstudio.com/adobetuts/oldphoto.psd
That's all folks! What do you think? :)