Finance

FM proposes no submitting of Revenue Tax Return (ITR) by senior residents – Verify eligibility

fm-proposes-no-submitting-of-revenue-tax-return-itr-by-senior-residents-verify-eligibility

Budget 2021: In an unprecedented initiative, Union Budget 2021-22 has been delivered in paperless form for the first time.

Budget 2021 for Senior Citizens: Finance Minister Nirmala Sitharaman, while presenting the Budget 2021, has proposed no filing of Income Tax Return (ITR) by senior citizens who are above 75 years of age and have only pension and interest income. Pension from the ex-employer is taxed under the income tax head of Salary while family pension is taxed as ‘income from other sources’. Interest income received from SCSS, bank fixed deposit etc is taxed as per one’s income slab under the head ‘income from other sources’.

The bank, however, will deduct the necessary tax before paying to them. It is important to note that they have not been exempted from paying tax but only from filing ITR provided the eligibility is there.

Under, Section 80TTB of the income tax act, interest income earned from deposits qualifies for a deduction from one’s gross total income. The maximum limit under section 80TTB is Rs 50,000 in a year. This section is available to senior citizens since April 1, 2018. Importantly, the benefit of section 80TTA, which allows a deduction of the interest income (up to Rs 10,000) from the savings account, is not available to the senior citizens.

Section 139 of the Act provides for filing of return of income. Sub-section (1) of the section provides that every person being an individual if his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to
income-tax, shall, on or before the due date, furnish a return of his income.

For those less than 60 years of age, income up to Rs 2.5 lakh in a financial year is tax-exempt and they are not required to file ITR. For those who are 60 years or above but less than 80 years, the limit is Rs 3 lakh, while for those who are 80 years or more, the exemption limit is Rs 5 lakh and they are also not required to file ITR.

On income between Rs 3 lakh and Rs 5 lakh, the income tax rate is 5 per cent, while on income between Rs 5 lakh and Rs 10 lakh, the income tax rate is 20 per cent, and on income above Rs 10 lakh, the tax rate is 30 per cent.

For senior citizens who are 80 years or above, on income between Rs 5 lakh and Rs 10 lakh, the income tax rate is 20 per cent, while on income above Rs 10 lakh, the tax rate is 30 per cent.

In order to provide relief to senior citizens who are of the age of 75 years or above and to reduce compliance for them, it is proposed to insert a new section to provide relaxation from filing the return of income, if the following conditions are satisfied:-

(i) The senior citizen is resident in India and of the age of 75 or more during the previous year;

(ii) He has pension income and no other income. However, in addition to such pension income he may have also have interest income from the same bank in which he is receiving his pension income;

(iii) This bank is a specified bank. The Government will be notifying a few banks, which are banking company, to be the specified bank; and

(iv) He shall be required to furnish a declaration to the specified bank. The declaration shall be containing such particulars, in such form and verified in such manner, as may be prescribed.

The proposal not to file ITR by senior citizens who are above 75 years of age and have only pension and interest income will come as a relief to the taxpayers.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

0 Comments
Share

Steven Gregory