Income Tax Return filing for senior citizens in India; all you need to know

When it comes to filing income tax returns in India, senior citizens are not automatically exempt from this responsibility. If you are a senior citizen who is an Indian resident and has a taxable income that exceeds a certain limit, then it is mandatory for you to file an income tax return (ITR).

An income tax return is essentially a form that individuals, companies, and organizations use to report their income, deductions, and taxes paid for a specific financial year. It is a crucial compliance requirement for individuals and organizations in India, as it helps the government keep track of taxpayers' income and ensure that they pay the correct amount of tax.

For income tax purposes, a senior citizen is defined as an individual resident who is 60 years or above but less than 80 years of age at any time during the previous year. A super senior citizen, on the other hand, is someone who is 80 years or above at any time during the previous year.

Contrary to popular belief, the Income-tax Act, 1961, provides no exemption to senior citizens or very senior citizens from filing a return of income. However, to provide some relief to senior citizens whose age is 75 years or more and to reduce the compliance burden on them, the Finance Act, 2021, has introduced section 194P.

This provision requires a banking company to deduct tax if the deductee (the recipient of the pension income) is maintaining an account with it and meets certain conditions. If the aforementioned requirements are met, the deductor (the bank) will calculate the deductee's income after taking the deduction allowed under Chapter VI-A and the rebate under section 87A into account. If a senior citizen's salary is subject to taxation, they are not required to submit their income tax return for the year in which the tax was deducted.

In comparison to regular taxpayers, senior citizens and super seniors are given a greater exemption limit. The income threshold below which an individual is exempt from paying tax is known as the exemption limit. A senior citizen is given an exemption maximum of Rs. 3,00,000 for the fiscal year 2022–2023 as opposed to Rs. 2,50,000 for non–senior citizens. The exemption threshold for a super senior person is Rs. 5,000 for the same fiscal year. If the income is less than Rs. 5 lakhs, a section 87A rebate of up to Rs. 12,500 is possible under the new tax regime.

You can submit your income tax return in paper mode if you are a very senior citizen and using Form ITR 1/4. However, if you'd like to, you can elect to e-file it.

Every individual whose anticipated tax liability for the year is Rs. 10,000 or more is required to pay their tax in advance in the form of "advance tax," per section 208. However, section 207 exempts a resident senior citizen who was 60 years of age or older during the pertinent financial year and had no income from a business or profession from paying advance tax.

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