Senior Citizen – Exempt From Filing ITR

The Income-Tax Act, of 1961 does not provide for the exemption of a senior citizen or a very senior citizen from completing a refund of income. However, to provide relief for the elderly (75 years of age or older) and to reduce the burden of compliance on them, the Finance Act, of 2021, introduced a new section 194P. This article will discuss Exemption for ITR filing for senior citizens.

What is section 194P?

Section 194P has been introduced in the 2021 Budget to provide a conditional exemption for a person over the age of 75 from completing the income tax returns.
Section 139 of the Income Tax Act governs the imposition of income tax returns by each person earning more than the basic exemption limit.
However, Union Budget 2021 to provide relief from the burden of compliance with tax returns, exempts adults over the age of 75 from completing tax returns.

Conditions of exemption under section 194P

• Senior citizens must be 75 years of age or older.
• Senior citizens should be ‘Residents’ last year.
• You only have a pension and interest income. Interest rate collected/received from the same bank stated where he or she receives a pension.
• The senior citizen will submit a notice containing certain details to the said bank.
• The bank is a ‘specified bank’ as informed by the Central Government. Such banks will be liable for the TDS seizure of adults after processing the deductions under Chapter VI-A and the rebate below 87A.

If the aforementioned bank, as mentioned above, deducts tax for senior citizens over the age of 75, there will be no need to file a tax return for them.

Declaration filing by senior citizen

The specified bank will pull the TDS based on the announcement sent by the senior citizen of the bank.

The declaration must contain the information specified below:

• Total income of the senior citizen
• Deductions are available under categories 80C to 80U
• Rebate obtained under section 87A
• Confirmation of pension funds and interest income only from senior citizen

Benefits under Section 194P

If the specified bank draws TDS under section 194P, the provisions of section 139 (return filing) will not apply to a senior citizen of 75 years of age and older. This means that if the said bank deducts TDS under this category, then the senior citizen must not file its ITR.

Final words

Thus, an eligible senior citizen with a bank account or any other specified bank may submit this declaration. However, keep in mind that this declaration will be for the current FY and is therefore related to the release on completion of the current FY ITR to be paid next year i.e. FY2022-23. Hope you got a short ride on the exemption of filing ITR for senior citizens.