Section 194P of Income Tax Act:
- Section 194P is new section inserted by Finance Act 2021 and it is effective from from 1st April 2021.
- This section provides relief to senior citizens for exemption from filing of Income Tax returns whose age is aged 75 years and above.
Conditions for Applicability u/s 194P:
The following conditions are need to satisfied for exemption under section 194P
- 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 containing some details (mentioned below) to the specified 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 deduct TDS for senior citizens above 75 years of age, then there is no need to file income tax return by senior citizen.
Declaration submission by senior citizen:
The following declaration has to made to specified bank for tax deductions by senior citizen
- Total income of the senior citizen
- Deductions availed under section 80C to 80U
- Rebate available under section 87A
- Confirmation from the senior citizen of having only pension and interest income
