IT Returns for 75 Year Old Senior Citizens: Exemption Rules & Process

IT Returns for 75 Year Old Senior Citizens have a special exemption under Section 194P of the Income Tax Act, 1961. Introduced in Union Budget 2021, this provision reduces compliance burden for elderly taxpayers living only on pension and bank interest.

Who Can Claim the Exemption

A senior citizen aged 75 years or above is exempt from filing ITR if:

• They are a resident of India.
• Income sources are only pension and bank interest.
• Pension and interest are received in the same specified bank.
• They submit Form 12BBA declaring income and deductions.

Filing Process Simplified

• Submit Form 12BBA to the bank.
• Provide PAN, PPO, income details, and deductions (80C, 80D, 80TTB, etc.).
• The bank will calculate taxable income, apply deductions, and deduct TDS.

Once TDS is deducted, the senior citizen need not file ITR separately.

Specified Bank

A specified bank means a scheduled bank notified by the Government, acting as an agent of RBI. Most major public and private sector banks fall under this definition.

Why This Rule Matters

• Simplifies tax compliance for seniors.
• Reduces dependence on online filing.
• Provides relief to pensioners relying only on bank interest and pensions.

Case Example

Mr. Sharma, 77 years old, earns ₹4,50,000 pension and ₹1,20,000 bank interest. He files Form 12BBA with his bank. The bank applies deductions under Section 80C and deducts TDS. Mr. Sharma is not required to file ITR.

Useful Links

• CBDT Notification on Section 194P
• RBI List of Scheduled Banks
• Income Tax Portal – Senior Citizen Guidelines

IT Returns for 75 Year Old Senior Citizens are governed by special exemption rules under Section 194P of the Income Tax Act, 1961.

A senior citizen aged 75 or older is not required to submit an Income Tax Return (ITR) if  he / she fulfils  certain terms and conditions  : 

This provision was introduced in the Union Budget 2021 through Section 194P of the Income Tax Act, 1961, to ease the compliance burden for this specific group of taxpayers.

Conditions for ITR Filing Exemption

To be exempt from filing an ITR, a senior citizen aged 75 or above must fulfill all of the following conditions:

• Age: The individual must be a resident of India and be 75 years or older during the previous financial year.
• Income Source: The only sources of income for the individual should be pension and interest. No other income, such as rental income, capital gains, or business income, is allowed.
• Specified Bank: The pension and the interest income must be received in the same “specified bank” that has been notified by the Central Government for this purpose. The interest income can be from a savings account or fixed deposits held in that same bank.
• Declaration: The senior citizen must submit a declaration to the specified bank.

How to Avail the Exemption

The process is designed to be straightforward, with the bank taking on the responsibility of tax calculation and deduction.

1. Submit a Declaration (Form 12BBA): The senior citizen needs to provide a declaration to their specified bank. The form for this purpose is Form 12BBA. This declaration provides the bank with the necessary information to calculate the tax liability.
2. Provide Necessary Information: In the declaration form, you will need to provide details such as:
   • Your Permanent Account Number (PAN).
   • Your Pension Payment Order (PPO) number.
   • Details of your total income (pension and interest).
   • Information about any deductions you wish to claim under Chapter VI-A (e.g., Section 80C, 80D, 80U, 80TTB) and the rebate under Section 87A (if your total income is below a certain limit).

1. Bank’s Role: Once the bank receives this declaration, it becomes responsible for:
   • Calculating your total income by adding your pension and interest income.
   • Applying the eligible deductions and rebates.
   • Calculating the final tax liability.
   • Deducting the appropriate amount of tax at source (TDS) from your account.

By following this process, the specified bank handles all the tax compliance, and the senior citizen is not required to file an ITR. This simplifies the process, making it easier for them to manage their financial responsibilities.

Who is a “Specified Bank”?

According to the Income Tax Act, 1961, and subsequent notifications from the Central Board of Direct Taxes (CBDT), a “specified bank” is defined as:

A banking company which is a scheduled bank and has been appointed as an agent of the Reserve Bank of India (RBI) under section 45 of the Reserve Bank of India Act, 1934.

In simple terms, this includes almost all major public and private sector banks in India. The term “scheduled bank” refers to banks listed in the Second Schedule of the Reserve Bank of India Act, 1934. These are essentially all commercial banks (public, private, foreign) and some cooperative banks that meet certain criteria.