Section 194P- Exemption for ITR filing for senior citizen

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Exemption of ITR filing to senior citizens

Finance Act 2021 inserted a new section 194P which provided conditions for exempting senior citizens from filing Income Tax returns aged 75 years and above. New Section 194P will become applicable from 1st April 2021

Section 139 of the Income Tax Act governs the filing of income tax returns by every individual with income above the basic exemption limit.

However, Union Budget 2021 in order to provide relief in terms of compliance burden for filing returns, exempted senior citizens above 75 years of age from filing the income tax return, subject to the following conditions:

  • Senior citizens should be of age 75 years or above. 
  • Senior citizens should be ‘ Resident’ in the previous year. 
  • He has pension income and interest income only. Interest income accrued/ earned from the same specified bank in which he is receiving his pension.
  • The senior citizen will submit a declaration to its bank containing details of Chapter VI-A deductions, rebate allowable under 87A of the income tax and stating that they have not earned any other income except pension and interest income from the same bank.
  • The bank is a ‘specified bank’ as notified by the Central Government. Such banks will be responsible for the TDS deduction of senior citizens after considering the deductions under Chapter VI-A and rebate under 87A. 

Once the specified bank, as mentioned above, deducts tax for senior citizens above 75 years of age, there will be no requirement to furnish income tax return by senior citizens.

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