Individuals whose income exceeds the basic exemption limit in a financial year are required to file income tax return (ITR) in India. However, what is the case with senior citizens? Are senior and super senior citizens exempt from filing income tax return? Or, are they also required to file ITR?

It may be noted that as per Section 139 of the Income Tax Act, 1961, any taxpayer, including a senior citizen (60 years or more in age but less than 80 years) and super senior citizen (80 years or above in age), who does not have income exceeding the basic exemption limits is mandatorily not required to file a tax return.

“The basic income exemption threshold is currently Rs 3 lakh per annum in case of senior citizens and Rs 5 lakh per annum in case of super senior citizens under the existing tax regime. Under the new regime, this basic exemption limit is Rs 2.5 lakh for all taxpayers for FY 2022-23,” says Parizad Sirwalla, Partner and Head, Global Mobility Services, Tax, KPMG in India.

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The exceptions to the above (i.e., when return filing is required in spite of the income being below the threshold limit) are as follows:

* If the senior citizen / super senior citizen is a resident and ordinary resident of India and has foreign assets during the relevant tax year (irrespective of whether income has been generated from such foreign assets).

* Has deposited amount exceeding Rs 1 crore in one or more current accounts maintained with banks during the relevant tax year.

* Has deposited in one or more savings bank account amount in aggregate Rs 50 lakh or more during the relevant tax year.

* Has expenditure incurred towards foreign travel either for himself or any other person of amount exceeding Rs 2 lakh during the relevant tax year.

* Has expenditure incurred towards consumption of electricity of amount exceeding Rs 1 lakh during the relevant tax year.

* If the aggregate of TDS and TCS during the tax year is Rs 50,000 or more for senior citizens (Rs 25,000 if the senior citizen is a non-resident), during the relevant tax year.

* Total sales / turnover / gross receipts from the business exceeds Rs 60 lakh during the relevant tax year.

* Total gross receipts from profession exceeds Rs 10 lakh during the relevant tax year.

Thus, “a senior citizen (60+ Years) must file the income tax return if his gross total income during the previous year exceeds the basic exemption limit of Rs 3,00,000. For a super senior citizen (80+ Years), this limit will be increased to Rs 5,00,000. However, if they opt for the alternative tax regime, the limit shall be Rs 2,50,000. It should be noted that it is mandatory to file ITR in certain situations even if the income is below the basic exemption limit, like foreign expenditure, electricity bill above the threshold, etc,” says Naveen Wadhwa, DGM, Taxmann.

However, there is also a relief provided for specified senior citizens not to file a tax return even if their income exceeds the basic exemption limit. As per Section 194P of the Income Tax Act, conditions for such exemption are:

* A resident senior citizen should be of age 75 years or above in the tax year.

* Such specified senior citizen has pension income and interest income only. Such interest income is accrued / earned from the same specified bank in which he is receiving his pension.

* The senior citizen will submit a declaration to the specified bank.

* The bank is a ‘specified bank’ as notified by the Central Government. “Such banks will be responsible for the TDS deduction of senior citizens after considering the deductions under Chapter VI-A and rebate under Section 87A of the Act,” says Sirwalla.

* Once the specified bank, as mentioned above, deducts tax for such specified senior citizens, there will be no requirement to furnish income tax returns.