Income Tax Exemption: If you are 75 years of age or older, you might not need to file an Income Tax Return (ITR) this year. But like all benefits, this comes with certain eligibility criteria. To understand how to make the most of this benefit, learn what conditions must be met. Also, understand what forms need to be submitted in case no return is filed and what circumstances grant waiver from ITR filing. Who qualifies for this exemption? You must be 75 years of age or older in the assessment year 2025-26. To qualify for the income tax exemption, you must be an Indian citizen. Additionally, your income must be limited to pension and interest income from banking institutions. If you receive a pension and bank interest from two respective banks, or have any additional income, then you must file ITR. Additional income refers to rental income, capital gains, or income from a business.What rules have to be followed?Largely, you'll get an exemption only on pension payments and interest received from the same bank. Filling Form 12BBA is necessary and submission of it should be done to the bank. If the form is submitted correctly, the bank will calculate your total income, deductions, tax and pay the tax to the government.What does the bank have to do?The total taxable income for the user to the Bank is calculated. Some deductions like section 80C, 80D, and exemption of 87A are claimed. Taxable TDS i.e. tax is also deducted and deposited. If all the stated conditions are met, then the bank deposited the tax, then there is no requirement for ITR.What are the income sources which do not allow exemption?In case, other income sources are available like rent and shares profit, then exemption is not available for income tax return filling. Having accounts in multiple banks also disqualifies for exemption irrespective of interest received. In the case of pension and interest from different banks, the benefits of relief are not available.What is the reason for this?Most of the elderly individuals encounter challenges in comprehending and filling out the online ITR filing or tax documents. This law was passed so that senior citizen’s income is very restricted and straightforward does not require a tax consultant or intricate procedures. The Government of India aims to simplify tax compliance for senior citizens, as long as all conditions are met. Broadly, if the person is 75 years of age and above and the only income is from a pension and interest from the same bank, then there is no need to file returns and take advantage of the exemption. Complete Form 12BBA and submit it to the bank. The bank will determine the tax liability and deduct it at source. In cases where there is any other type of income, then the usual ITR filing will have to be done.
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