Income Tax Return filing: When are Senior and Super Senior Citizens obligated to file ITR?

ITR Filing for Senior Citizens: Taxpayers in India who surpass the basic exemption limit must file an income tax return (ITR). However, what about senior citizens? Are senior and super senior citizens exempt from this requirement? Or are they also obligated to file their tax return?

It should be noted that according to Section 139 of the Income Tax Act, 1961, any taxpayer, whether a senior citizen (aged 60 years or more but less than 80 years) or a super senior citizen (aged 80 years or above), who does not have income exceeding the basic exemption limits is not required to file a tax return.

The current basic income exemption threshold stands at Rs 3 lakh per annum for senior citizens and Rs 5 lakh per annum for super senior citizens under the old tax regime. However, under the new regime, this basic exemption limit is set at Rs 3 lakh for all taxpayers for FY 2023-24.

Also Read: ITR Filing: Top 10 benefits of filing income tax return on time even when not compulsory

The following are the exceptions to the aforementioned rule regarding the necessity of filing a return, even when the income is below the prescribed threshold limit:

* A senior citizen or super senior citizen who is a resident and an ordinary resident of India and possesses foreign assets during the applicable tax year (regardless of whether any income has been derived from those foreign assets).

* An individual who has made deposits exceeding Rs 1 crore in one or more current accounts held with banks during the applicable tax year.

* An individual who has deposited a total of Rs 50 lakh or more in one or more savings bank accounts during the applicable tax year.

* An individual who has incurred expenses for foreign travel, either for themselves or for another person, amounting to more than Rs 2 lakh during the applicable tax year.

* If the total electricity consumption expenses amount to more than Rs 100,000 in the applicable tax year.

* If the combined total of TDS and TCS is Rs 50,000 or higher for senior citizens (Rs 25,000 for non-resident senior citizens) in the relevant tax year.

* If the total sales/ turnover/ gross receipts from the business surpass Rs 60 lakh in the relevant tax year.

* If the total gross receipts from the profession exceed Rs 10 lakh in the relevant tax year.

Thus, a senior citizen aged 60 years or above is required to submit their income tax return if their gross total income in the previous year exceeds the basic exemption limit of Rs 3,00,000. For super senior citizens aged 80 years or above, this limit is raised to Rs 5,00,000 under the old tax regime. However, if they choose the alternative tax regime, the limit is set at Rs 3,00,000. It is important to note that in certain situations, such as foreign expenditure or electricity bills above the threshold, it is mandatory to file an ITR even if the income is below the basic exemption limit.

However, there exists a provision that allows certain senior citizens to be exempt from filing a tax return, even if their income surpasses the basic exemption threshold.

According to Section 194P of the Income Tax Act, the criteria for this exemption are as follows:

* A resident senior citizen must be at least 75 years old during the tax year.

* The eligible senior citizen should derive income solely from pension and interest, with the interest being generated from the same designated bank where the pension is received.

* The senior citizen is required to provide a declaration to the designated bank.

* The bank must be classified as a ‘specified bank’ as designated by the Central Government. These banks will be tasked with the responsibility of deducting TDS for senior citizens, taking into account the deductions under Chapter VI-A and the rebate under Section 87A of the I-T Act.

* Once the specified bank has deducted the tax for these senior citizens, there will be no obligation to file income tax returns.