According to Budget 2021, there’s a concession for those aged 75 years and above.
Taxpayers over the age of 75 are exempt from filing income tax returns.
The Ministry is also implementing the Integrated Programme for Older Persons scheme.
However, this concessions proposed by the Finance Minister do not mean that those over 75 with only pension and interest income, will not be required to pay income tax.
Many senior citizens got euphoric after listening to the budget speech on television and mistakenly thought it to be that way.
To be clear, this exemption is not from paying taxes but from filing returns, subject to certain conditions.
The very first condition being that the senior citizen should not have any income from sources other than pension and interest.
Secondly, the pension account and fixed deposits should be in the same bank.
As a result, the bank will deduct the applicable tax at source, obviating the need for payment of taxes separately by the assesse.
The third condition being that the senior citizen having fixed deposits in two or more banks will not be exempted from filing returns.
The fourth condition says that senior citizens having income from investments in mutual funds, shares, insurance schemes, debt instruments etc. will not be exempt from filing income-tax returns.
Lastly, the senior citizens will be required to file returns to seek refund in case excess tax is paid to the exchequer.
However, the presumption is not that the senior citizen does not have taxable income, rather all TDS is taken care of and only two types of incomes are earned – interest and pension.
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