NEW DELHI: For senior residents of 75 years and above on the lookout for exemption from submitting earnings tax returns, the Central Board of Direct Taxes (CBDT) has notified a declaration type that must be submitted to their banks.
CBDT’s notification is in step with the announcement made throughout Union Budget 2021, when the federal government had exempted senior residents aged 75 and above, having earnings solely from pension and curiosity from mounted deposits from submitting earnings tax returns starting the present fiscal.
The caveat is that solely these seniors whose earnings from FD and pension is deposited in the identical financial institution shall be eligible for the exemption.
The tax division has now requested such eligible senior taxpayers to submit declaration of earnings in type 12BBA with their respective banks. The type will collect info on whole earnings, declaration of earnings from pension and FD curiosity, particulars on deduction claimed below chapter VI–A (from part 80C to part 80U) and rebate claimed below part 87A.
The financial institution will then assess the shape to compute the full taxable earnings and deduct the required tax on it.
“On furnishing of the declaration in Form No. 12BBA, the specified bank shall, after giving effect to the deduction allowable under Chapter VI-A and rebate allowable under section 87A, compute the total income of such specified senior citizen for the relevant assessment year and deduct income-tax on such total income on the basis of the rates in force,” the notification acknowledged.
The declaration is to be made yearly by the taxpayer.
Form exhaustive however useful
Form 12BBA is as exhaustive as an ITR type. That stated, the transfer remains to be a significant compliance reduction to senior taxpayers, as per Karan Batra, founder, charteredclub.com.
“For senior citizens above 75 years of age, it’s difficult to file IT returns. Majority of them are not well versed with a computer and may have to seek a CA’s help for tax filing. So, with this ruling, the government has essentially instructed the banker to file the returns on senior taxpayer’s behalf,” he stated.
The financial institution will act as a degree of contact for the senior taxpayers to assist them fill type 12BBA, Batra added.
“The form is comprehensive but now the senior taxpayers will have an informed authority to assist them fill it. In filing ITR, they don’t have any kind of assistance whatsoever.”
Itesh Dodhi, director, Nangia & Co LLP, concurred and stated with devoted counters for senior residents in all main banks and doorstep banking to senior citizen, this measure is predicted to make life simpler for them.
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