ITR filing 2023: These senior citizens do not have to file income tax returns. Details here

The deadline for filing income tax returns (ITR) for the financial year 2022-23 is 31st July 2023. There is uncertainty among individuals, particularly senior citizens, regarding the requirement to file ITR for the said financial year.

Section 194P of the Income-tax Act, 1961, introduced in Budget 2021, provides an exemption to specific senior citizens from the obligation of filing income tax returns, subject to meeting specific eligibility criteria. This provision has been in effect since 1st April 2021. 

Under the provisions of Section 194P of the Income Tax Act, senior citizens are exempted from filing income tax returns (ITR) if they fulfill specific conditions. These conditions include being a resident of India and reaching the age of 75 years or above by the end of the financial year 2022-23. 

Furthermore, their income should solely consist of pensions or interest earned through banks, specifically from the same specified bank where they receive their pension. Senior citizens must also submit a declaration to these specified banks to avail of this exemption.

If senior citizens have their deposits in the same bank from where they receive their pension, they can request the bank to deduct the correct amount of Tax Deducted at Source (TDS) and may not have to file their income tax return (ITR) if they have submitted a declaration to the bank. In such cases, the bank can facilitate the deduction of taxes based on relevant provisions like Chapter VIA (such as 80C, etc.) and deposit the tax on their behalf. 

Consequently, there will be no requirement to file an ITR. However, it is important to note that it is advisable to file an income tax return if the income exceeds the taxable limit, or if TDS has been deducted despite the income being below the taxable limit, as this allows individuals to claim a refund if applicable.

The Income Tax Act of 1961, specifically Section 194P, outlines the conditions under which senior citizens aged 75 years and above are exempted from filing income tax returns for Assessment Year 2023-2024.

To be eligible for exemption under Section 194P, the following conditions must be met by a senior citizen:

Age Requirement: The senior citizen should be 75 years or above in the relevant financial year.

Residency: The senior citizen should be classified as a "Resident" in the previous year.

Source of Income: The senior citizen should have income solely from pension and interest. Moreover, the interest income should be accrued/earned from the same specified bank from which they receive their pension.

Declaration: The senior citizen is required to submit a declaration to the specified bank.

Specified Bank: The specified bank refers to the banks notified by the Central Government. These banks are responsible for TDS for senior citizens after considering deductions under Chapter VI-A & rebate u/s 87A.

Once the specified bank deducts tax for senior citizens aged 75 years or above, there is no need for these senior citizens to file income tax returns.

In summary, if a senior citizen meets the age requirement, is a resident, has income limited to pensions and interest from the same specified bank, and submits a declaration to the bank, they will be exempted from filing income tax returns. The specified bank will handle the deduction of TDS for these senior citizens.

Is the government planning to extend the July 31 deadline for filing income tax returns (ITR)?

The finance ministry has urged taxpayers to submit their returns promptly, stating that there are no current plans to extend the July 31 deadline. Revenue Secretary Sanjay Malhotra expressed optimism about an increase in filing numbers compared to the previous year.

Also Read: Section 54F of Income Tax Act: Understanding Capital Gains Tax, Indexation & Its Benefits