Same tax, less hassle for 75-plus

Same tax, less hassle for 75-plus

TEAM TOI

02.02.2021

The Budget has attempted to reduce the compliance burden on senior citizens above 75 years of age having only pension and interest income by exempting them from filing tax returns.

However, if seniors have any other income like rentals from house and investments in mutual funds, they will have to file the return. Therefore, its effectiveness would be limited to those pensioners who do not have any income other than pension. In addition to such pension income he or she may also have interest income from the same bank in which the pension is coming in.

Also, certain conditions need to be satisfied for getting exemption from return filing. In order to implement the scheme, the central government plans to notify a few banks as specified bank for the purpose. In order to avail the benefit, the pensioner will have to open his or her account in the specified bank.

Pensioner will also be required to furnish a declaration to the specified bank containing particulars as specified by the government. The bank will also verify the declaration.

Once the declaration is furnished and verified, the specified bank would be required to compute the income of the senior citizen after giving effect to the deduction and rebate allowed under the I-T Act. The bank will deduct the necessary tax, and the senior citizen will be saved the hassle of filing returns.

IT’S A BREEZE FOR SENIORS