Senior citizens are not automatically exempted from filing Income Tax Return (ITR) in India. Senior citizens, who are Indian residents and whose taxable income exceeds specified limits, are required to file ITR.
What is Income Tax Return?
In India, an Income Tax Return (ITR) is a form that individuals, companies and organizations file with the Income Tax Department to report their income, deductions and taxes paid for a specific financial year. The Income Tax Act, 1961, mandates the filing of ITR by individuals whose gross total income exceeds the basic exemption limit or who wish to claim refund of any tax paid.
Filing of ITR is an important compliance requirement for individuals and organizations in India. It helps the government track the income of taxpayers and ensure that they pay the right amount of tax.
Read also: Income Tax Return: Know These ITR Basics Before It’s Too Late
Who is a Senior Citizen and Very Senior Citizen?
A resident individual who is 60 years or more but less than 80 years at any time during the previous year is treated as a senior citizen for income tax purposes. A very senior citizen is a resident individual who is 80 years or more at any time during the previous year.
Income Tax Return for Senior and Very Senior Citizens
Is a senior citizen exempted from filing Income Tax Return (ITR)?
The Income Tax Act, 1961 does not provide any exemption to senior citizens or very senior citizens from filing return of income. However, in order to provide relief to senior citizens (who are 75 years of age or more) and reduce the compliance burden on them, Section 194P has been inserted in the Finance Act, 2021.
This provision requires a banking company to deduct tax under this provision if the deductee maintains an account with it in which he is receiving his pension income. Tax is required to be deducted under this provision if the payee is a resident individual who is of the age of 75 years or more at any time during the year and the following conditions are satisfied:
- The total income of the deductee includes only income in the nature of pension and interest received or receivable from any account maintained with the deductor (such bank).
- The deductee has submitted a declaration to the deductor containing the prescribed particulars.
If the above conditions are satisfied, then the deductor shall compute the income of the deductor after giving effect to the deduction allowable under Chapter VI-A and exemption under section 87A. Tax on such income is required to be deducted at the applicable rates.
If tax is deducted from the income of such senior citizen, he shall not be liable to furnish the return of income of the previous year in which tax has been deducted.
What are the benefits available to senior and very senior citizens in tax rates?
Higher exemption limit is given to senior citizens and very senior citizens as compared to normal taxpayers. Exemption limit is that amount of income up to which a person is not liable to pay tax.
The extent of exemption given to senior citizens and very senior citizens for the financial year 2022-23 is as follows:
senior citizen
A senior citizen is given a higher exemption limit than non-senior citizens. The exemption limit for the financial year 2022-23 available to resident senior citizens is Rs. 3,00,000. For non-senior citizens the exemption limit is Rs. 2,50,000.
very senior citizen
The exemption limit available to resident very senior citizens for the financial year 2022-23 is Rs. 5,00,000.
However, in the new tax regime, a deduction of up to Rs 12,500 is available under Section 87A, if the income does not exceed Rs 5 lakh. This exemption is available only to resident individuals. Taxpayers like NRIs, Hindu Undivided Families and Firms are not exempted under this section.
Are very senior citizens exempted from e-filing of Income Tax Return?
A very senior citizen filing return of income in Form ITR 1/4 can file return of income in paper mode, i.e. e-filing of ITR 1/4 (as the case may be) is not mandatory. However, he/she can go for e-filing if he/she so desires.
Is a resident senior citizen exempt from payment of advance tax?
that That is, every person, whose estimated tax liability for the year is Rs. 10,000 or more, shall pay his tax in advance, as ‘advance tax’. However, section 207 provides relief to a resident senior citizen from payment of advance tax.
As per section 207 a resident senior citizen (i.e. a person aged 60 years or more during the relevant financial year) who does not have any income from business or profession is not liable to pay advance tax.
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