Section 194P to the Income Tax Act, 1961 is inserted vide the Finance Act, 2021. Provisions of section 194P provide conditional relaxation to the specified senior citizen from filing of an Income Tax Return.
The entire provisions of the newly introduced section 194P are briefly explained in the present article.
Before going through and understanding the provisions of section 194P, it is important to understand the following two terms-
1. Specified senior citizen –
The person will qualify as a ‘specified senior citizen’ if it satisfies the following conditions-
2. Specified bank –
A specified bank means a bank as notified by the Central Government.
Provisions of section 194P states as under-
Once the tax is deducted by the specified bank under section 194P, the provisions of section 139 will not apply to the senior citizen.
In nut-shell, such senior citizens are not required to furnish their income tax return.
As seen above, TDS would be deducted by the specified bank on the basis of the declaration filed by the specified senior citizen. The declaration would condition details like-
However, it is important to note here that the form and manner of submission of declaration are not yet prescribed.
The provisions of section 194P of the Income Tax Act are effective from 1st April 2021.
Following table summarizes the provisions of section 194P of the Income Tax Act–
|Applicability of provisions of section 194P||Section 194P is applicable to the person satisfying the following conditions-
|Declaration||For availing of the benefit, the specified senior citizen needs to file a declaration with a specified bank.|
|Deduction of TDS under section 194P||Based on the information provided via declaration, the specified bank will deduct appropriate income tax.|
|The benefit to senior citizen||The senior citizen is not required to file an income tax return.|