The latest update for Taxpayers, as the government has announced No ITR Filing for citizens aged 75 years and above. The announcement was made in Finance Budget, 2021. Thus, The Central Board of Direct Taxes (CBDT) has now issued regulations and declaration forms that elderly persons must file with the designated bank, which will deduct tax from pension and interest income and deposit it with the government. In this article, we will read about the latest update by CBDT on ITR Filing for Senior Citizens in detail.
Finance Minister Nirmala Sitharaman on Relaxation for Senior Citizens
“The budget aims to lessen the burden of compliance for seniors aged 75 years or older in the 75th year of independence. Such older individuals will not have to submit an income tax return if their main source of income is a pension or interest income. Therefore, The paying bank will deduct the required tax from their income,” said FM Nirmala Sitharaman in her 2021 Budget speech.
New Amendment relation to No ITR Filing for Senior Citizens
The amendment relating to relaxation for senior citizens (Age 75 years or above) in the filing of ITR after fulfilling certain conditions will be applicable from Financial Year 2021-22 (the assessment year 2022-23).
Important Note – If your income exceeds the basic tax exemption limit, then you must do ITR Filing for the Fiscal Year 2020-21. If a senior citizen fails to meet the deadline for submitting for the year 2020-21, a late filing penalty of Rs 5,000 would be imposed. If the total income does not exceed Rs 5 lakh, the fine for late reporting will however not be more than Rs 1,000.
Who is eligible for the exemption scheme to ITR Filing for Senior Citizens?
To be eligible under the exemption scheme, senior citizens have to comply with certain conditions. These conditions are as follows.
- The Senior Citizen must be an Indian Resident and should be older or at least 75 years of age.
- The Income of Senior Citizens should be only from the pension. However, a senior citizen might also be earning interest income from the same bank in which he received his pension income. Thus, It means that the older citizen who has a bank account in which only one bank receives a pension is eligible.
- The account should be with a specific bank only. A list of banks qualifying for that purpose has been set up by the government.
Lastly, Once the declaration is provided, the designated bank must compute the income of such senior citizens for the relevant assessment year after taking into account the deduction allowed under Chapter VI-A and the rebate allowed under Section 87A of the Act, and deduct income tax based on the rates in effect. Once it completes, such elderly persons will no longer be required to file an income tax return for the current fiscal year.
Download E-Startup Mobile App and Never miss the latest updates narrating to your business.