UNION BUDGET 2021: Senior citizens of 75 years and above having pension income and interest from fixed deposits in the same bank would not be required to file income tax returns for the financial year beginning April 1.
In the Budget Speech 2021-22, Finance Minister Nirmala Sitharaman said that in the 75th year of Independence of our country, the government shall reduce compliance burden on senior citizens who are 75 years of age and above.
"For senior citizens who only have pension and interest income, I propose exemption from filing their income tax returns. The paying bank will deduct the necessary tax on their income," she said.
The exemption from filing income tax returns would be available only in case where the interest income is earned in the same bank where pension is deposited.
Bank will deduct the income tax, which he has to pay and deposit to the government. The condition is the person should have only pension income and interest from fixed deposit should accrue in the same bank.
However if the senior citizen person has other incomes, he/she would be required to file an income tax return (ITR).
Generally, persons of 75 years or more have mostly pension income and the money is parked in a fixed deposit from which they earn interest. For them, filing returns used to be complicated. So, we have made it simpler and said banks will deduct their income tax and they need not file ITR, said Finance Secretary Ajay Bhushan Pandey during an after Budget meeting with the media.