Union finances 2021: Seniors over 75 years of age exempt from submitting income tax returns, Enterprise & Economic system Information

Finance Minister Nirmala Sitharaman said on Monday that seniors over 75 years old with only pension income are now exempt from filing income tax returns.

"I offer them a pranam and when India has completed 75 years of independence, I try to reduce their compliance burden," Sitharaman said.

She also loosened the careful feedback filing pricing for everyone by announcing that in addition to TDS and pre-filled salaries, details like capital gains and interest on postal and other investments will also be pre-filled.

The former employer's pension is taxed under the income tax director of salary, while the family pension is taxed as “income from other sources”. Interest earned on SCSS, bank deposits, etc. is taxed according to the income list under the heading “Income from Other Sources”.

The bank that pays them income will deduct the required tax from their bank account.

This came after changes to tax law were announced in the 2018 budget to give senior citizens more tax benefits.

These include tax benefits like the introduction of a new section 80TTB in the Income Tax Act of 1961, the deduction for medical expenses in the absence of health insurance, etc.

"We will reduce the compliance burden for our seniors aged 75 and over. For seniors who only have pension and interest income, I propose an exemption from filing their income tax returns," said FM Nirmala Sitharaman.

As to the reason for exempting such seniors from filing their ITR, Sitharaman said the move aims to give such citizens the option to pay their dues as they have devoted an important time of their lives to nation building.

It also proposed raising the tax audit threshold from Rs 5 billion to Rs 10 billion, albeit for those who do 95% digital processing.

(With contributions from agencies)