Budget 2021: The government has made special provisions in the budget to save senior citizens above 75 years from the hassle of filing income tax returns.
New Delhi, Feb 6: The Center has given relief to senior citizens from filing income tax returns (ITRs) from the next financial year 2021-22, citing difficulties in filing income tax returns. This concession will be available from April 1, 2021. Senior Citizens aged 75 years and above will get this concession. Of course, there are some conditions attached to it. This has been mentioned in the Union Budget recently presented by Union Finance Minister Nirmala Sitharaman.
In a report in News18, chartered accountants Vikas Agarwal and Harigopal Patidar have analyzed the matter. According to him, only those senior citizens above 75 years of age who are getting income only from pension and interest can get this concession. In this, senior citizens should keep in mind that whatever deposits they have, they should be in the same bank where the pension account is. If the deposits are in another bank, then they can be transferred to the bank with the Pension Account. If an old FD has a high interest rate and a long expiration date, it should not be broken and transferred to another bank. In such a case, there will be no relief for not filing income tax return; But there will be no loss of interest. Just remember to file an income tax return as before.
Investment information should be given to the bank
If you want a waiver of non-filing of income tax return, the bank with which the pension account is located should inform the bank about the various types of investments made under section 80C-80U of the Income Tax Act. E.g. PPF, Life Insurance, ELSS, ULIS, etc. The bank will provide a form to provide this information. The government will release this form soon. This information is to be given to the bank in the same way as your investment information is given to the company while on the job. As per the rules laid down in the Income Tax Act, TDS will be deducted from the bank on the remaining taxable income by setting aside the concessional income. The income tax department will understand your return with this information provided by the bank. Earlier, if a mistake was made in filing a return, a fine of Rs 5,000 had to be paid; Now he will not have to pay the penalty, this is the benefit of the new scheme.
These senior citizens do not benefit
Senior citizens above the age of 75 who are earning income from rent, dividends, capital gains or trade in addition to pension, are not eligible to file income tax returns. They will have to pay it as before. Even if the pension account and the term deposit account are in different banks, you will still have to file an income tax return.
Existing tax slab
The current year’s tax slab is applicable to senior citizens for next year. According to the Income Tax Act 1961, taxpayers above 60 years and below 80 years are considered as senior citizens. The first option for them, of course, is that there is no tax on income up to Rs 3 lakh per annum as per the tax slab of the old system. Income between Rs 3 lakh and Rs 5 lakh will be taxed at 5 per cent, up to Rs 10 lakh at 20 per cent and above Rs 10 lakh at 30 per cent.
There is no discount on investment if you participate in the new tax system
The adoption of a new tax system that is different from the old tax system is no exception for senior citizens. This means that they will not get the 70 concessions given in the Income Tax Act. They will not have to pay tax up to Rs 2.5 lakh per annum. Five and a half lakhs to five lakhs, five to seven and a half lakhs to 10 per cent, seven and a half to ten lakhs to 15 per cent, 10 lakhs to one and a half lakhs to 20 per cent, 12.5 to 15 lakhs to 25 per cent and annual income above Rs 15 lakhs to 30 per cent.
Find out the benefits of this scheme based on the old tax system
R. K. Mishra, Lord Yadav and K. R. Chauhan is over 75 years old. Mishra gets Rs 4.5 lakh from pension and Rs 2.5 lakh from interest. Both the accounts are in SBI. Yadav gets an annual pension of Rs 3.5 lakh, while he gets Rs 2.5 lakh from interest. He also has a pension account and FD in SBI. Chouhan gets an annual pension of Rs 3.5 lakh, which is deposited in SBI. His FD is in BOI and he earns Rs 2.5 lakh annually from FD interest.
As you can see from this example, Chauhan has no tax liability; However, as their pension bank and FD bank are different, the bank has deducted TDS of Rs 15,000 on the interest earned from FD. They will have to file a return to get it back. Yadav’s income is the same as Chauhan’s; However, his pension and FD are in the same bank. So their TDS has not been deducted and they do not have to file a return.
