Filing income tax return (ITR) is mandatory for most individuals. But some of them are not required to file ITR on. Let’s take a look at who they are and why they aren’t required to file income tax returns for Assessment Year (AY 2024-25).
According to Section 194P of the Income-tax Act 1961, senior citizens aged 75 and above may be exempt from filing income tax returns for FY 23-24 if they meet specific conditions.
So, if a senior citizen is 75 years old or above and meets certain criteria, they do not need to file an ITR for AY 2024-25.
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Conditions to Fulfill for Exemption from Filing ITR for AY 2024-25
Senior citizens must meet the following criteria to be exempt from filing an ITR:
- Must be a resident of India.
- Must be 75 years old or older during FY 2023-24 (ending March 31, 2024).
- Income should solely come from their pension, credited to their pension account with a specified bank.
- Should not have any other income except interest from accounts in the same specified bank where the pension is received.
- The bank must be a specified bank, meaning it is a scheduled bank appointed as an agent of RBI under section 45 of the RBI Act.
Remember that Section 194P of the Income-tax Act 1961 does not exempt senior citizens from paying taxes. Instead, it aims to simplify the process by relieving certain elderly individuals from the hassle of filing income tax returns.
Even if senior citizens meet the above criteria and are exempt from filing ITR, they must still submit a declaration to their bank using Form 12BBA.
How do Banks Calculate Taxable Income Under Section 194P for Senior Citizens?
Using the declaration in Form 12BBA, the bank will calculate the gross total income (pension plus interest income) for these pensioners. The bank will also consider the deductions, tax exemptions, and rebates under section 87A that these senior citizens are eligible for to determine their net taxable income.
Also Read: How to File Income Tax Return for AY 2024-25 Without Form 16: Step-by-step Guide
Based on this, the bank will then deduct TDS, taking into account all eligible deductions and rebates.
Is this Exemption Available Under Both the New and Old Income Tax Regimes?
Yes, senior citizens can avail themselves of this benefit under both the new and old tax regimes. Since exemptions are not available under the new tax regime, they likely won’t need to submit any documents to the bank if they opt for this regime.
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