Relief for Senior Citizens Above 75: Understanding Form 125 and ITR Exemption
From April 2026, relief has been provided to senior citizens. Eligible senior citizens will not have to file their income tax return if they meet some conditions.
To avail of this benefit, they need to submit Form No. 125 to their specified bank. Once the form is submitted, the bank will calculate the total taxable income, compute the tax payable, and deduct the required tax (TDS) on their behalf.
This step is meant to make tax compliance easier for senior citizens who usually have limited sources of income.
Let us understand in detail what Form No. 125 actually is:-
Who is a “Specified Senior Citizen”?
A “Specified Senior Citizen” refers to a person who:
- Is a resident individual,
- Is 75 years of age or older, and
- Earns income only from pension and interest,
- Where both the pension and interest are received or receivable through a notified/specified bank.
What is the purpose of form No. 125?
The purpose of Form No. 125 is to exempt certain senior citizens from the requirement of filing an Income Tax Return (ITR). By submitting this form to their specified bank, the bank calculates the total income, deducts the applicable tax, and finishes the tax compliance process for them.
Who should Form No. 125 be submitted to?
Form No. 125 must be given to the bank where the senior citizen receives their pension and interest income.
Is it compulsory to submit Form No. 125?
Yes, it is compulsory. A senior citizen must submit Form No. 125 if they want to claim exemption from filing an income tax return under section 263(8)(b).
Can Form 125 be submitted online?
Yes. You can submit Form 125 either in physical (paper) form or online through the bank’s net banking facility (if your bank provides this option).
When should Form 125 be submitted?
You need to submit Form 125 once every financial year for which you want an exemption from filing an income tax return.
Can Form 125 be changed or cancelled after submission?
Yes, Form 125 can be changed or cancelled only:
- If there is any change in your income or details, you must submit a new declaration.
- If you later earn income other than pension and bank interest, you must withdraw or revise the form.
- After withdrawal, you will need to file your income tax return.
Will TDS still be deducted after submitting Form 125?
Yes, the bank will still calculate your total income and deduct TDS after considering eligible deductions and rebates.
Form 125 only exempts you from filing a return of income. It does not stop TDS from being deducted.
