Simplifying Tax Compliance: Section 194P for Senior Citizens
Introduction: Section 194P, introduced in the Union Finance Bill 2021, eases tax filing for senior citizens aged 75 years and above.
Purpose: Aims to relieve the compliance burden by exempting eligible senior citizens from filing income tax returns.
Meaning of Section 194P: Delegates TDS deduction responsibility for specified senior citizens' income to their banks.
Specified Senior Citizen Criteria:
Age: 75 years or above during the previous year.
Residency: Must be an Indian resident.
Income Sources: Limited to pension and interest income.
Source of Interest Income: Accrued from the same bank as pension income.
Declarations Required:
Chapter VI-A Deductions: Eligible deductions declaration.
Rebate under Section 87A: Confirmation of eligibility.
Other Income: Affirmation of no other income besides pension and interest.
Total Income: Declaration of total income, including pension and interest.
Specified Bank Requirement: Bank must be designated by the Central Government.
Exceptions to Exemption: Mandates filing ITR if exceeding specified thresholds for deposits, foreign expenditure, or electricity expenses.