The government made special provisions in the budget to save senior citizens above 75 years from the hassle of submitting income tax returns.
New Delhi. In view of the difficulties faced by senior citizens in filing returns, the central government has exempted the submission of Income Tax Return from the next financial year i.e. 2021-22. This discount will be available from April 1, 2021. This relaxation will be given to the elderly aged 75 years or more. But some conditions have also been imposed for this. Recently, Finance Minister Nirmala Sitaraman has mentioned this in the Budget presented in Parliament.
Chartered accountants Vikas Aggarwal and Harigopal Patidar have analyzed these provisions for News18. According to him, 75-year-old senior citizens who have income from pension and interest only, they can get exemption to file returns. However, the elderly have to keep in mind that all the deposits they have, should be in a bank with a pension account. If presently in another bank, they can get it transferred to pension bank. It is also important to keep in mind that if there is more interest in an old FD and there is time to complete it, then it would be right not to break the FD. In such a case you will not get the benefit of this scheme of the government. But there will also be no loss of interest. Just like before, returns have to be filed.
Bank will have to give information about various investments.
To get the exemption of filing returns in the bank with your pension account, the bank will have to give information about various investments such as PPF, life insurance, ELSS, ULIS etc. under Section 80C-80U of Income Tax. For this, the bank will give you a form. Government will issue this form soon. Understand this like that in a job, you give all the information to your company, in a similar way. Now the bank will separate the deductible deductions stated in the Income Tax Act from the income and deduct TDS on the remaining taxable income. The Income Tax Department will consider this information of the bank as a return to you. The advantage of this would be that if there was a mistake in filing returns earlier, then a penalty of Rs 5000 was imposed. Now she will not have to give.
Above 75 years, these senior citizens will not get benefit
Elders with income other than pension or income from rent, dividend, capital gains or business etc. will have to file returns as before. Not only this, the pension bank and deposit bank will have to submit the returns even if they are different.
According to the existing tax slab, for TDS
Senior Citizens, the tax slab of the current year is applicable for the next year. According to the Income Tax Act, 1961, tax payers above 60 years and 80 years of age are considered as Senior Citizens. The alternative for them is that there is no tax on the annual income of 3 lakh rupees in the old system tax slab. Tax will be given at the rate of 5 percent for 3 to 5 lakhs, 20 percent up to 10 lakhs and 30 percent on more than 10 lakhs.
will not get a discount on investment after joining the new tax regime
There is no exception for senior citizens by adopting a new tax regime different from the tax slabs of the old system. That is, they will not get 70 exemptions given in the Income Tax Act. They will not have to pay any tax up to 2.5 lakh rupees annually. Whereas 2.5 lakh to 5 lakh 5 percent, 5 percent to 7.5 lakh 10 percent, 7.5 lakh to 10 lakh 15 percent, 10 lakh to 12.5 lakh 20 percent, 12.5 lakh to 15 lakh 25 percent and above 15 lakh. Tax will have to be paid up to 30 percent.
be understood from the old tax system, what will be the benefit of this scheme
RK Mishra, Parmeshwar Yadav and KR Chauhan are over 75 years old. The income from Mishra’s pension is Rs 450000 and the income from interest on deposit is Rs 250000. Both are in SBI. Yadav’s income from pension is Rs 350000 annually and income from interest is Rs 250000. He too has a pension and deposit with SBI. While Chauhan’s pension comes to SBI at Rs 350000 per annum and the deposit is in BoI. The interest they get from deposits is Rs 250000 annually. Understand from the table below, all three will benefit or loss from the new government scheme.
Through this example, you will see that no tax liability is being created on KR Chauhan. But since their pension bank and deposit bank are different. Therefore, the bank has deducted TDS of 15000 rupees on the interest received from the deposit. They will have to file a return to get it refunded. Whereas Yadav has neither deducted TDS on his equal income nor needs to file returns.
