The Central Board of Direct Taxes (CBDT) has now notified rules and declaration forms which senior citizens would have to file with the specified bank who in turn would deduct tax on pension and interest income and deposit with the government.
The income tax department has notified declaration forms to be filed by senior citizens aged 75 years and above with the banks to get exemption from filing I-T returns for the fiscal year 2021-22.
The 2021-22 Budget had introduced a provision for exempting senior citizens of 75 years and above having pension income and interest from fixed deposits in the same bank from filing income tax returns for the financial year beginning April 1.
The Central Board of Direct Taxes (CBDT) has now notified rules and declaration forms which senior citizens would have to file with the specified bank who in turn would deduct tax on pension and interest income and deposit with the government.
Such exemption from ITR filing would be available only in cases where the interest income is earned in the same bank where the pension is deposited.
The income-tax act requires all individuals having income exceeding the threshold limit to file their income-tax returns. While the threshold for senior citizens (60 years or more) and super senior citizens (80 years or more) is slightly higher, crossing the threshold saddles one to file tax returns.
Non-filing of tax returns not only attracts penalties and but also gets subject to the higher rate of TDS.
Nangia & Co LLP Director Itesh Dodhi said recognizing the compliance burden on senior citizens, this year's budget brought in some relief to the senior citizens above the age of 75.
"The CBDT has notified the forms (Form 12BBA) for a declaration by the senior citizens to the banks and notified the reporting requirement by the specified banks. With dedicated counters for senior citizens in all major banks and banks providing doorstep banking to senior citizens, this measure is expected to make life easier for senior citizens," Dodhi added.
In the Budget Speech 2021-22, Finance Minister Nirmala Sitharaman had said that in the 75th year of Independence of our country, the government shall reduce the compliance burden on senior citizens who are 75 years of age and above.
"For senior citizens who only have a pension and interest income, I propose exemption from filing their income tax returns. The paying bank will deduct the necessary tax on their income," she had said.
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