Tax Filing Tips for Senior Citizens: Review Form 26AS, AIS, and Claim TDS Refunds
The deadline for filing income tax returns (ITR) by July 31, 2024, is approaching. Senior citizens should start early to file their returns without errors. Here are some key points:
Higher Exemption Limits: For the age group of 60 to below 80 years, the basic exemption limit is Rs.3 lakh whereas, in the case of senior or super senior citizens that is above 80 years, the basic exemption limit is Rs.5 lakh in Old Tax Regime. However please note that the New Tax regime provides no such distinction.
Report All Incomes: Always include every other receipt of income that one gets, such as interest, commissions or dividends in their ITR to avoid penalties that come with it.
Avail Relevant Tax Deductions: Save tax through specific deductions, such as on the Senior Citizen Savings Scheme under Section 80C or on the interest earned from a bank account under Section 80TTB, provided it’s up to Rs.50000.
Avail Section 194P: Many seniors assume they do not have to file returns if tax is deducted at the source (TDS) on their income. This is wrong. The exemption under Section 194P applies only if the senior citizen is 75 or older, was a ‘resident’ in the previous year, has just pension and interest income, and has submitted a declaration to their bank.
It is the bank’s responsibility to deduct necessary taxes on senior citizens’ behalf, thus eliminating the need for them to file returns. Those who are qualified for a tax refund must file a return.
Claim Section 87A Rebate: All resident taxpayers below the age of 60 having or not having income above Rs.5 Lacs are eligible for this rebate.
Standard Deduction: The present government has announced that seniors can avail standard deduction which can go up to Rs.50,000 against their salary and pension income.
Include Rental Income: This, provided that if rent comes from children, then it must be disclosed in ITRs.
Choose the Right ITR Form: ITR 1 should be filled if the earnings are from salary or pension, ITR 2 should be filled for other incomes such as capital gains, ITR 3 for business earnings and ITR 4 for earning under the presumptive tax.
Before the filing of TDS please verify all the Forms 26AS and AIS. Preserve evidence of deductions and submit them to the banks if the criteria for Section 194P apply.
