When Are Senior Citizens Not Required To File Income Tax Return (ITR)?

The deadline for income-tax return (ITR) filing is approaching fast, and everyone is completing the process. However, when it comes to senior citizens aged 75 years and above whose only income source is a pension and its interest, the rules are lenient. Section 194P of the Income-tax Act, 1961, lays down rules for ITR filing by the elderly. The rule of exemption from filing ITR was passed in the Finance Act, 2021, and has been effective since April 1, 2021. While Section 139 of the Income-tax Act mandates every taxpayer to file ITR, seniors who meet the conditions of Section 194P remain exempted. 

Section 194P

To be eligible for exemption from filing ITR, a senior citizen needs to fulfil the following conditions:

• Such a senior citizen should be aged 75 years or above

• The person should have been a resident of India in the previous year

• The person should have one source of income, which is a pension, and the interest income earned from the same account in which the pension is received

What Is The Process To Claim The Benefit?

Getting an ITR filed by a chartered accountant is a common practice in India. This is despite the simpler ITR forms and online filing facility. However, for seniors living on a straightforward pension income, the Act makes it even more convenient by exempting them from filing ITR. However, this does not mean that they won’t be paying tax, and the Income Tax Department will not have their records. The Section simply frees eligible senior citizens from the hassle of filing ITR.

The process to avail of the exemption involves:

Eligible senior citizens need to submit a declaration to the bank in this regard.

The bank will deduct the TDS - tax deducted at source, per provisions under the Chapter VI-A and rebate under Section 87A.

Note that Chapter VI-A has the Sections of the Act under which a taxpayer can claim deductions from the total income, such as Section 80C.

Section 87A is a tax rebate for income-tax payers whose income does not exceed a certain limit. For example, under the old tax regime for the financial year 2024-25, a rebate of Rs 12,500 is allowed if income does not exceed Rs 5 lakh, and under the new regime, Rs 25,000 if income is up to Rs 7 lakh

When the bank deducts TDS, if applicable, senior citizens do not need to file an ITR. The declaration and TDS deduction suffice for the ITR filing requirement

Point To Note

If a senior citizen has income from pension and also from some other sources, say, income from shares, rentals, etc., in that case Section 194P exemption will not be allowed. Such seniors are required to file ITR as usual.