Senior citizens of 75 years and above having pension income and interest from fixed deposit in the same bank would not be required to file income tax returns for the financial year beginning April 1.
In the Budget Speech 2021-22, Finance Minister Nirmala Sitharaman said that in the 75th year of Independence of our country, the government shall reduce compliance burden on senior citizens who are 75 years of age and above.
“For senior citizens who only have pension and interest income, I propose exemption from filing their income tax returns. The paying bank will deduct the necessary tax on their income,” she said.
Addressing reporters, Finance Secretary Ajay Bhushan Pandey said the exemption from filing income tax returns would be available only in case where the interest income is earned in the same bank where pension is deposited.
“Persons whose age is above 75 years and who has pension income and interest from fixed deposit comes in the same bank and who has only interest income, they need not file income tax return.
“Bank will deduct the income tax which he has to pay and deposit to the government. The condition is the person should have only pension income and interest from fixed deposit should accrue in the same bank,” he said at the post-Budget press conference.
He added that if the senior citizen person has other incomes, he/she would be required to file income tax return (ITR).
“Generally, persons of 75 years or more have mostly pension income and the money is parked in fixed deposit from which he earns interest. For them, filing return used to be complicated. So, we have made it simpler and said banks will deduct their income tax and they need not file ITR,” Pandey added.
With regard to the new agri-infrastructure development cess imposed in the Budget, he said it would have no additional burden on a common man as the customs duty on those same items have ben reduced accordingly.
“We have imposed agri infra development cess on about 14-15 items… The total amount that we estimate (to garner) is Rs 30,000 crore,” he said.
A new agriculture infrastructure and development cess will be imposed from February 2 on customs duty levied on bullion, alcoholic beverages, coal and agri products ranging from apple to lentil.
But, to reduce the burden on consumer, customs or import duty on these items was cut.
A cess of Rs 2.5 per litre on petrol and Rs 4 per litre on diesel were also slapped but this was offset by a reduction of an equivalent amount in the excise duty, making it price neutral for consumers.