Seniors over 75 should declare pension, interest income for ITR filing exemption
NEW DELHI: For senior citizens of 75 years above looking for exemption from filing income tax returns, the Central Board of Direct Taxes (CBDT) has notified a declaration form that needs to be submitted to their banks.
CBDT’s notification is in line with the announcement made during Union Budget 2021, when the government had exempted senior citizens aged 75 above, having income only from pension interest from fixed deposits from filing income tax returns beginning the current fiscal.
The caveat is that only those seniors whose income from FD pension is deposited in the same bank will be eligible for the exemption.
The tax department has now asked such eligible senior taxpayers to submit declaration of income in form 12BBA with their respective banks. The form will gather information on total income, declaration of income from pension FD interest, details on deduction claimed under chapter VI–A (from section 80C to section 80U) rebate claimed under section 87A.
The bank will then assess the form to compute the total taxable income deduct the necessary tax on it.
“On furnishing of the declaration in Form No. 12BBA, the specified bank shall, after giving effect to the deduction allowable under Chapter VI-A rebate allowable under section 87A, compute the total income of such specified senior citizen for the relevant assessment year deduct income-tax on such total income on the basis of the rates in force,” the notification stated.
The declaration is to be made every year by the taxpayer.
Form exhaustive but beneficial
Form 12BBA is as exhaustive as an ITR form. That said, the move is still a major compliance relief to senior taxpayers, as per Karan Batra, founder, charteredclub.com.
“For senior citizens above 75 years of age, it’s difficult to file IT returns. Majority of them are not well versed with a computer may have to seek a CA’s help for tax filing. So, with this ruling, the government has essentially instructed the banker to file the returns on senior taxpayer’s behalf,” he said.
The bank will act as a point of contact for the senior taxpayers to help them fill form 12BBA, Batra added.
“The form is comprehensive but now the senior taxpayers will have an informed authority to assist them fill it. In filing ITR, they don’t have any kind of assistance whatsoever.”
Itesh Dodhi, director, Nangia & Co LLP, concurred said with dedicated counters for senior citizens in all major banks doorstep banking to senior citizen, this measure is expected to make life easier for them.
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