No ITR for Specified Senior Citizens: Through Finance Act 2021 a new section 194P was inserted in IT Act
ITR for Senior Citizens – To give a much-needed relief to the senior citizens who are 75-years of age or more, the government has given this exemption in filing of the Income Tax Returns (ITR).
The government inserted a new section 194P in Income-tax Act,1961 which provides that senior citizens above the age of 75 years, having only pension and interest income from accounts maintained with bank in which they receive pension will be exempted from filing ITR.
The Ministry of Finance has also tweeted in this regard today. This was introduced in Budget 2021 and announced by Finance Minister Nirmala Sitharaman.
See Tweet Here:
Through Finance Act, 2021 a new section 194P was inserted in the Income Tax Act, 1961 which provides senior citizens above the age of 75 years, having only pension & interest income from accounts maintained with bank in which they receive pension will be exempted from filing Income Tax Returns.
“Now 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 back will deduct the necessary tax on their income,” FM had said in her budget speech in 2021.
Senior citizens and a very senior citizen are granted a higher exemption limit as compared to normal taxpayers. Exemption limit is the quantum of income up to which a person is not liable to pay tax.
The exemption limit granted to senior citizen and very senior citizen for the financial year 2020-21 is as follows:
Senior citizen
A senior citizen is granted a higher exemption limit compared to non-senior citizens. The exemption limit for the financial year 2020-21 available to a resident senior citizen is Rs. 3,00,000. The exemption limit for non-senior citizen is Rs. 2,50,000. Thus, it can be observed that an additional benefit of Rs. 50,000 in the form of higher exemption limit is available to a resident senior citizen as compared to normal taxpayers.
Very senior citizen
A very senior citizen is granted a higher exemption limit compared to others. The exemption limit for the financial year 2020-21 available to a resident very senior citizen is Rs. 5,00,000. The exemption limit for non-senior citizen is Rs. 2,50,000. Thus, it can be observed that an additional benefit of Rs. 2,50,000 in the form of higher exemption limit is available to a resident very senior citizen as compared to normal taxpayers.
Source: Income Tax FAQ
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