New Delhi: Senior Citizens above the age of 75 years, who only have pension and interest as a source of income, will be exempted from filing income tax returns (ITR) (ITR) for the fiscal year 2021-22. The Central Board of Direct Taxes (CBDT) has now notified rules and declaration forms which senior citizens would have to file with the specified bank. The banks will deduct tax on pension and interest income and deposit it with the government.
This new relaxation was announced by finance minister Nirmala Sitharaman during the Union Budget 2021. “In the 75th year of Independence of our country, the government shall reduce compliance burden on senior citizens who are 75 years of age and above,” she said.
“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,” the finance minister further added.
The Budget 2021 has proposed to insert a new section to provide relaxation from filing ITR for senior citizens who are above 75, on the following conditions:
- The senior citizen is a resident in India and of the age of 75 or more during the previous year.
- The senior citizen has a pension and no other income. However, he or she may have interest income from the same bank in which he or she is receiving his or her pension income.
- This bank is a specified bank. The central government will be notifying a few banks, which are banking companies, to be the specified bank, mentioned in the Budget 2021.
- He or she has to furnish a declaration to the specified bank. The declaration containing such particulars, in such form and verified in such manner, as may be prescribed
Senior citizens who are above 75 years of age are not exempted from paying tax but only from filing income tax returns (ITR) on the above-mentioned conditions. The exemption from filing income tax returns would be available only in cases where the interest income is earned in the same bank where the pension is deposited.
The last date of filing income tax returns (ITR) for the financial year 2020-21 was extended to September 30, in view of COVID-19.