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Friday 24 September 2021
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Income Tax Return New Rule: Senior Citizens > 75 years

For senior citizens of 75 years and above looking for exemption from filing income tax returns, the Central Board of Direct Taxes has notified a declaration form that needs to be submitted to their banks.

CBDT’s notification is in line with the announcement made during Union Budget 2021, when the government had exempted senior citizens aged 75 and above, having income only from pension and interest from fixed deposits from filing income tax returns beginning the current fiscal.

The caveat is that only those seniors whose income from FD and pension is deposited in the same bank will be eligible for the exemption.

The tax department has now asked such eligible senior taxpayers to submit declaration of income in form 12BBA with their respective banks. The form will gather information on total income, declaration of income from pension and FD interest, details on deduction claimed under chapter VI–A (from section 80C to section 80U) and rebate claimed under section 87A.

The bank will then assess the form to compute the total taxable income and deduct the necessary tax on it.

“On furnishing of the declaration in Form No. 12BBA, the specified bank shall, after giving effect to the deduction allowable under Chapter VI-A and rebate allowable under section 87A, compute the total income of such specified senior citizen for the relevant assessment year and deduct income-tax on such total income on the basis of the rates in force,” the notification stated.

The declaration is to be made every year by the taxpayer.

Form 12BBA is as exhaustive as an ITR form. That said, the move is still a major compliance relief to senior taxpayers

For senior citizens above 75 years of age, it’s difficult to file IT returns. Majority of them are not well versed with a computer and may have to seek a CA’s help for tax filing. So, with this ruling, the government has essentially instructed the banker to file the returns on senior taxpayer’s behalf.

The bank will act as a point of contact for the senior taxpayers to help them fill form 12BBA.

With dedicated counters for senior citizens in all major banks and doorstep banking to senior citizen, this measure is expected to make life easier for them.

Finance Act 2021 has inserted a new section 194P in the Income Tax Act 1961 to provide Relaxation for certain category of senior citizen of 75 years or more from filing return of income-tax (ITR)

As per the newly inserted section 194P, the relaxation from filing return of income is available to senior citizens who are of the age of 75 year or above on satisfying the following conditions :-

(i) The senior citizen is resident in India and of the age of 75 or more during the previous year;

(ii) He has pension income and no other income. However, in addition to such pension income he may have also have interest income from the same bank in which he is receiving his pension income,

(iii) This bank is a specified bank. The Government will be notifying a few banks, which are banking company, to be the specified bank; and

The senior citizen is required to furnish a declaration to the specified bank.CBDT has notified the Income-tax (26th Amendment) Rules, 2021 and introduced new Rule 26D with respect to furnishing of declaration and evidence of claims by specified senior citizen under section 194P

The said Rule 26D provides that the declaration required to be furnished by the specified senior citizen to the bank shall be in Form no. 12BBA.

On furnishing of the declaration in Form No. 12BBA, the specified bank shall, after giving effect to the deduction allowable under Chapter VI-A and rebate allowable under section 87A, compute the total income of such specified senior citizen for the relevant assessment year and deduct income-tax on such total income on the basis of the rates in force.




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