Question
Download Solution PDFProposed in 2023-24, which section of the Income Tax Act of 1961 exempts senior citizens aged 75 years and above from filing income tax returns?
Answer (Detailed Solution Below)
Detailed Solution
Download Solution PDFThe Correct answer is Section 194P.
Key Points
- Section 194P was introduced in the Finance Act 2021 and became applicable from 1st April 2021.
- This section provides relief to senior citizens aged 75 years and above, exempting them from filing income tax returns under certain conditions.
- The exemption applies only if the senior citizen has income exclusively from pension and interest earned on deposits in the same bank where the pension is credited.
- The bank, in such cases, is required to deduct the applicable tax at source (TDS) after considering deductions under Chapter VI-A like Section 80C, 80D, etc., ensuring no tax liability remains.
- This provision aims to simplify tax compliance for elderly individuals who might face challenges in filing returns due to age or health-related reasons.
- It is applicable only for banks that have been notified by the government for this purpose, ensuring proper implementation.
- Senior citizens must submit a declaration to the bank confirming their eligibility under this section.
Additional Information
- Section 139A
- Section 139A of the Income Tax Act deals with the requirement of obtaining a PAN (Permanent Account Number).
- PAN is mandatory for certain transactions such as opening a bank account, filing income tax returns, and making financial transactions above a specific limit.
- This section helps in identifying taxpayers and linking their financial transactions.
- Section 234C
- Section 234C pertains to the payment of interest for default or delay in payment of advance tax.
- If a taxpayer fails to pay advance tax installments as required, interest is levied under this section.
- It ensures timely payment of taxes by taxpayers and prevents accumulation of tax liability.
- Section 80C
- Section 80C allows taxpayers to claim deductions up to ₹1.5 lakh for specified investments and expenses.
- Eligible investments include PPF, ELSS, NSC, FD (5 years), etc.
- This section encourages savings and investments by offering tax benefits.
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