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Section 194P – TDS on Income of Specified Senior citizen and Exemption from Return Filing

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Section 194P provides conditional relief to the senior citizen above 75 years from filing the Income-tax return. The sub-section (1) of Section 194P provides that in spite of anything restrained in the provisions of Chapter XVII-B, in case of a defined senior citizen, the selected bank shall, after deducting deductions allowable under Chapter VI-A and rebate permissible under section 87A, compute the total income of such specified senior citizen for the pertinent assessment year and deduct income-tax on such total income on the basis of the evaluates in force.

Explanation to the said section chase to define the following:

  • ”Specified bank” means a banking company as the Central Government may notify in Official Gazette,
  • “Specified senior citizen” means an individual, being a resident in India:
  • Having an age of seventy-five years or more at any time during the previous year,
  • Having pension income and no other income. However, in addition, a person can also receive or due to receive any interest from the same specified bank in which a person is getting pension,
  • And has enhanced a declaration to the specified bank containing such particulars, in such form and demonstrated in such manner, as may be prescribed.

Need to file ITR?
As per Section 139(1) of the Income Tax Act’1961, every person is an individual, if his total income or the total income of any other person in regard of which he is computable under this Act during the previous year transcended the maximum amount which is not chargeable to income-tax, shall, on or before the due date, enhance a return of his income.

Once the senior citizen and TDS furnish the specified bank deducts the declaration under section 194P, there will be no requirement to enhance the return of income for the relevant previous year by that specified senior citizen as per 194P(2).

Conditions for exemptions under section 194P
Following are the conditions for exemption under section 194P:

  • Senior citizens should be of age 75 years or above.
  • Senior citizens should be residents in the previous year.
  • He has pension income and interest income only. Interest income accrued/ earned from the same specified bank in which he is receiving his pension.
  • The senior citizen will submit a declaration containing some details to the specified bank
  • The bank is a “specified bank” as notified by the central government. Therefore, such banks will be responsible for the TDS deduction of senior citizens after considering the deductions under Chapter VI-A and rebate under 87A.

Once the specified bank as mentioned above shall deduct TDS based on a declaration submitted by the senior citizen to the bank.

Filing of a declaration by senior citizen
The specified bank, as mentioned above, shall deduct TDS based on a declaration submitted by the senior citizen to the bank. 

The declaration should contain the below-mentioned details:

  • Total income of the senior citizen
  • Deductions availed under section 80C to 80U
  • Rebate available under section 87A
  • Confirmation from the senior citizen of having only pension and interest income.

Benefits to the senior citizen under 194P
Once the specified bank as mentioned above deducts TDS under section 194P, section 139 (return filing) will not apply to senior citizens aged 75 years and above. It means that if the specified bank deducts TDS under this section, then the senior citizen need not file their ITR. Thus, an eligible senior citizen having a bank account with any scheduled bank can submit this declaration.

At AJSH, we assist our clients with various income tax compliances, including income tax assessments, TDS returns, ITR filings, tax advisory and other related services by providing them adequate support and guidance from our end. If you have any questions or wish to know more about section 194P, kindly contact us.

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