Finance Bill 2021 has introduced Section194P under the Income Tax Act 1961, whereby relaxation in filing the Income Tax Return has been provided to the specified senior citizens who are of the age of 75 years or more and a resident in India.
[Notification No. 98/2021/F. No. 370142/11/2021-TPL] As per the said notification specified bank is required to deduct tax after considering the deduction under Chapter VI-A and rebate u/s 87A at the rates applicable to the respective assessment year. TDS is required to be determined where:
- The Income of the assessee consists of Pension and interest income from any account maintained with the notified specified bank.
- Declaration has been provided to the notified bank.
In order to reduce the tax compliance burden on the specified senior citizen filing of Income Tax Return is not mandatory i.e., the provision of section 139 will not be applied to such senior citizen provided the tax has been deducted from such income by the notified bank.
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