SECTION 194P- TAX DEDUCTION IN CASE OF SPECIFIED SENIOR CITIZEN
Finance Act 2021 inserted a new section 194P which provided conditions for exempting senior citizens from filing Income Tax returns aged 75 years and above. New Section 194P will become applicable from 1st April 2021.
What is Section 194P?
Meaning of term ‘specified senior citizen’ and ‘specified bank’
Before going through and understanding the provisions of section 194P, it is important to understand the following two terms-
1. Specified senior citizen –
The person will qualify as a ‘specified senior citizen’ if it satisfies the following conditions-
2. Specified bank –
A specified bank means a bank as notified by the Central Government.
Benefit available to specified senior citizen under section 194P
Once the tax is deducted by the specified bank under section 194P, the provisions of section 139 will not apply to the senior citizen.
In nut-shell, such senior citizens are not required to furnish their income tax return.
Filing of the declaration-
As seen above, TDS would be deducted by the specified bank on the basis of the declaration filed by the specified senior citizen. The declaration would condition details like-
Applicability Date of Section 194P:
The provisions of section 194P of the Income Tax Act are effective from 1st April 2021.
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