In order to provide big relief, to the senior citizens aged 75 or above from IT filing, Ministry has introduced Section 194P in the Income-Tax Act, 1961 via the Finance Act 2021. New Section 194P is applicable from 1st day of April 2021. They can give a simple declaration to his/her bank to get exemption from filing the Income Tax Return (ITR) for AY 2022-23.
♦ Section 196P of the Income Tax Act, 1961:
Section 194P of the Income Tax Act, 1961 provides conditions for exempting Senior Citizens from filing income tax returns aged 75 years and above.
♦ Conditions for exemption:
1) Senior Citizen should be of age 75 years or above
2) Senior Citizen should be ‘Resident’ in the previous year
3) Senior Citizen has pension income and interest income only & interest income accrued/earned from the same specified bank in which he is receiving his pension
♦ ITR Filing related points – what we must know:
1. The rule prescribes a new physical form, 12BBA, that needs to be furnished to banks by the eligible senior citizen.
2. Department has also notified a separate Annexure-II in Form 16 with the details of incomes and deductions available only to the eligible senior citizens.
3. “For computation of the taxable income, the bank will consider the declaration submitted by the senior citizen, the pension and interest income received as also the applicable deductions and rebate.
4. After this exercise (mentioned in point 3), the bank will deduct TDS and issue Form 16 to the senior citizen.
5. No exemption from ITR Filing if, Senior citizen 75 years or more with multiple bank accounts will not get any exemption from filing ITR.
6. The provisions pertaining to submission of return of income under section 139 of the Income Tax Act 1961, shall not apply to the specified senior citizen for the assessment year relevant to the previous year in which tax is deducted under section 194P.
7. Once the specified bank deducts tax under section 197P, the specified senior citizens are not required to file ITR since section 139 will not apply to them.
8. CBDT has notified a new rule 26D, under which senior citizens are required to submit form 12BBA with the specified bank to claim the benefit of section 194P.
9. Necessary amendment have been made in various provisions and returns including, form 16, form 24Q, form 26QC and form 26QD to incorporate necessary changes related to provisions of section 194P.
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Author Bio
I really wonder how many benefitted under 196P. It seems a publicity stunt as if a good thing is done