SECTION 194 P
Section 194P is recently introduced in Budget 2021 to provide a relief to senior citizens above the age of 75 years from filing the income tax return. It helps an individual to provide relief in terms of burden compliances from filing income tax returns.
Conditions for exemption under section 194 P
An individual is required to fulfil the following conditions to claim for the exemption under section 194P:
- Person should be above the age of 75 years or above;
- Individual should be resident individual in the previous year;
- The source of income should be in the form of pension and interest only;
- The senior citizen is required to file a declaration containing some details to the specified bank;
‘Specified bank’ here means the bank notified by the Central Government. Such banks will be responsible for TDS deduction of senior citizen. After the deduction of the TDS by the bank the senior citizens are not required to file an income tax return.
Content of Declaration
The bank shall deduct TDS on the basis of declaration submitted by the senior citizen to the bank, the declaration shall contain the following information:
- Total income of the senior citizen;
- Deductions availed under section 80C to 80U;
- Rebate available under section 87A;
- Confirmation from the senior citizen of having only pension and interest income.
Benefit of section 194P
When the specified bank deduct tax on the basis of declaration submitted by the senior citizen, the provision of section 139 (filing of Income tax return) shall not be applicable, i.e. the senior citizen above the age of 75 years or above shall not be required to file Income Tax Return.
Disclaimer: The above-mentioned cases are illustrative and not exhaustive. This article is only for discussing general issues and hereby we do not express any opinion or give any consultation in whatsoever manner understood. The cases may differ from assessee to assessee. We recommend you to take expert advice depending upon your particular case.