This piece of news is for those senior citizens who are above 75 years and they only have pension and interest as their only source of income. They will now be exempted from filing the income tax returns (ITR) for the fiscal year 2021-22. In its notification, the Central Board of Direct Taxes (CBDT) has revealed several rules and declaration forms that would be filled by specified banks. The banks will further reduce the tax on pension and interest income and deposit with the government.
During the Union Budget 2021, finance minister Nirmala Sitharaman had announced that “In the 75th year of Independence of our country, the government shall reduce the compliance burden on senior citizens who are 75 years of age and above.”
“For senior citizens who only have a pension and interest income, I propose exemption from filing their income tax returns. The paying bank will deduct the necessary tax on their income,” finance minister further added.
The Budget 2021 has further proposed to make a new section for giving relaxation to senior citizens above 75 from filing ITR, but with certain terms and conditions:
(i) The senior citizen must be a resident of India with an age of 75 or more during the previous year
(ii) The senior citizen does not have any other income.
(iii) The bank should be a specified bank. The central government will name a few banks, which are banking companies, to be the specified bank, mentioned in the Budget 2021.
(iv) He or she will be asked to give a declaration to the specified bank.
Notably, the senior citizens will have to pay the tax at the end of the day. They will only be exempted from filing ITR.
“Bank will deduct the income tax which he has to pay and deposit to the government. The condition is the person should have only pension income and interest from fixed deposit should accrue in the same bank,” finance secretary Ajay Bhushan Pandey had earlier said.