There are many senior citizens in the category of 75 years and above age group who used to file the ITR earlier despite having only pension income. However, with the benefit available u/s 194P of the Income Tax Act, they are no longer required to file the ITR. Can every person in the eligible age group use the benefit u/s 194P? The answer is no! You need to fit into the criteria as prescribed u/s 194P for getting the exemption from tax filing. So, let’s find out some of the important conditions that are applicable for getting the exemption u/s 194P.
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Conditions Those Are Applicable For Getting Exemption U/S 194P
A Indian resident in the age group of 75 years and older with no income other than pension and bank interest, can enjoy the exemption from tax filing u/s 194P. The eligible person needs to declare the bank where he/she receives the pension and interest income. After declaration, the bank will deduct the TDS after adjusting the rebate u/s 87A. After declaration, once the banks deduct the tax, seniors are not required to file the tax again.
In the declaration (using form no. 12BBA), the senior has to mention details such as PAN detail, pension number, total income, deduction benefits availed under various sections i.e. sec 80C to 80U, rebate u/s 87A and a confirmation statement that the senior has income only from pension and interest. It is also important to calculate the total income carefully, here’s how to do it.
How To Calculate Taxable Income For Eligible Senior Citizens?
For calculating the taxable income, the bank considers the details furnished in Form no. 12BBA by the senior citizen. The bank computes the total income by totalling the pension and interest income as per the account statement and applies the deductions, tax exemptions and applicable rebates. After computing the taxable income, the bank deducts the TDS from the senior person’s account. If the senior person opts for the new tax regime, the bank won’t require any proof related to the deductions or exemptions, but it the senior opts for the old tax regime, the bank will ask for proof related to various deductions, such as investments and payment of health insurance premium, etc.
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Finally
The TDS deducted by the bank can be verified from Form 26AS. The option of not filing the tax u/s 194P is available only if your pension and interest are received in the account held with the specified bank as notified by the central government. Once the specified bank deducts the TDS, you don’t need to again file the ITR again for that year.