What is the section 194P ?
This section applicable only if individual having income of the nature of pension and no other income except the income of the mature of interest received or receivable from any account maintained by such individual in the same specified bank in which he is receiving his pension income and has furnished a declaration to the specified bank containing such particulars in form 12BBA and verified in such manner, as may be prescribed.
Who is the deductor for section 194P ?
Specified bank shall be deduct the TDS on the income of senior citizen.
What is the TDS rate applicable under section 194P of income tax ?
TDS shall be deduct on the basis of slab rate of total income of senior citizen.
What are the declarations required by specified Senior Citizen?
Specified senior citizens have to make these declarations to enable the specified bank in the form 12BBA to deduct the TDS on total income.
Deductions available under Chapter VI-A
Rebate available under section 87A
They have not earned any other income except pension and interest income.
Total Income
The bank shall deduct income tax on such total income on the basis of slab rate after considering any TDS deducted on pension.
Read Also : View TDS on Cash Withdrawal u/s 194N FAQs
What are the conditions 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, as mentioned above, deducts tax for senior citizens above 75 years of age, there will be no requirement to furnish income tax returns by senior citizens.
What is mean by specified bank under section 194P?
“specified bank” means a schedule bank which has been appointed as agent Reserve Bank of India (RBI) under section 45 of RBI Act,1934.
What is Section 87 A in income tax?
A rebate under section 87A is one of the income tax provisions that help taxpayers reduce their income tax liability. One can claim an income tax rebate of a maximum of INR 12,500 if the total income does not exceed INR 5 lakh in a financial year.
Read Also :Insertion of New TDS Section 194M
Who is a senior citizen as per Income Tax Act?
As per Income Tax Act 1961, an individual is treated as a senior citizen once he attains the age of 60 years or more and he will be treated as a super senior citizen once he attains the age of 80 years or more.
When is tax filing not mandatory?
As per the tax provisions, filing income tax returns is mandatory where the gross total income of an individual is more than the basic exemption. Here, Gross total income would mean the total income after loss adjustment but before any deductions under chapter VI-A.
