The Central Board of Direct Taxes (CBDT) has notified rules and forms granting relief from filing tax returns to pensioners above 75 years of age and to authorise their banks to compute and deduct applicable taxes to be paid to the government.
The Income-tax (26th Amendment) Rules notified by CBDT shows the manner of making a declaration to the bank by a senior citizen eligible for the relief. The relaxation from filing tax returns is available to those above this age and having pension income and interest income in the same bank and gives a declaration to the bank.
This benefit was announced by finance minister Nirmala Sitharaman in the union budget for FY22.
“In the 75th year of Independence of our country, when we continue our endeavour with renewed vigour, we shall reduce compliance burden on our senior citizens who are 75 years of age and above. For senior citizens who only have 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 minister had said in her budget speech.
The government has now brought out rules and the forms which senior citizens would have to file with their bank who in turn would deduct tax on pension and interest income and deposit with the government.
The interest income has to be earned in the same bank account in which the pension is received. Income Tax Act section 139 relating to return filing obligation will not apply in these cases.
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