Understand Section 194P of the Income Tax Act, 1961, facilitating easy filing of income tax returns for senior citizens aged 75 and above with only pension and interest income. Learn how to avail of TDS deduction benefits and simplify the tax filing process.
Section 194P is a relatively new provision introduced by the Income Tax Act, 1961, with effect from 1st July 2021. The main purpose of this provision is to facilitate easy filing of income tax return for senior citizens who are above the age of 75 years.
According to the section, senior citizens who are 75 years or above and have only pension and interest income as their sources of income, can submit a declaration to their respective banks for deduction of tax at source (TDS), if any, on the said income. This means that the bank would deduct tax on these incomes only if it exceeds the basic exemption limit and if the senior citizen has not submitted a declaration for submission of tax return.
However, if the senior citizen has income other than pension and interest, he/she would not be eligible for this provision and would be required to file their income tax return as per the regular provisions.
It is important to note that this provision does not exempt senior citizens from paying taxes. They would still be liable to pay taxes on their income, but through this provision, they can avoid the hassle of filing an income tax return.
This provision is a step towards easing the compliance burden on senior citizens and is a welcome move by the government. It would also help in reducing the number of income tax returns that the income tax department has to process.
In conclusion, section 194P of the Income Tax Act, 1961, is a beneficial provision for senior citizens above the age of 75 years who have a source of income limited to pension and interest. They can apply for the deduction of tax at source by submitting a declaration to their bank. However, it is advisable for senior citizens to consult their tax advisors regarding their tax liabilities and compliance requirements.
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HERE BANK WILL DEDUCT TDS ONLY TO THE EXTENT OF TAX LIABILITY OF THAT PERSON.
the above article is somewhat confusing.
the first part talks of submitting declaration for TDS to bank etc.
the latter parts mentions about citizens falling under the definition NOT being required to file ITR at all.
needs clarification. it would also be useful to reproduce the section itself.