Every individual whose age is 60 years or more is said to be a senior citizen. As per section 139 of the Income Tax Act, 1961 every resident senior citizen whose age is 60 years or more but below 80 years shall be required to file his return of income and pay tax on the following rates:-
| Income | Tax Rate |
| Upto INR 3 lakhs | NIL |
| Above 3 lakh but upto 5 lakh | 5% |
| Above 5 lakh but upto 10 lakh | 20% |
| Above 10 Lakh | 30% |
As per the Finance Bill, 2021 the finance ministry has proposed to introduce a new section wherein every individual whose age is 75 years or more and has income from pension shall be exempt from filing of return.
Further, if such person has interest income in addition to pension income, then also such person is exempt from filing of return provided that his interest income is from the same bank and such person furnishes a declaration to the specified bank.
Once declaration is furnished, the specified bank is required to compute the tax liability after giving the required deductions and rebate.
Points to note:
- This amendment is effective from 1st April 2021.
- Specified Bank has to be notified by the government.
Read More on Budget 2021
