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Exemptions for senior citizens
The provision to exempt older individuals, provided they fulfil certain conditions, was put forth by the central government in its Budget 2021 announcements. By inserting Section 194P (which came into effect on April, 2021) in the Income Tax Act, 1961, the Centre laid down the following conditions:
(1.) The senior citizen is a resident of India and aged 75 or above during the previous financial year, i.e. 2021-22.
(2.) He/she only has pension income and no other income. However, the person may also have interest income from the bank where pension income is being received.
(3.) The bank, in which pension and interest income is being received, is a ‘specified bank’ as notified by the Centre.
(4.) The senior citizen will be required to furnish a declaration to the bank, informing of it of particulars, in such form and verified in such manner, as may be prescribed.
(5.) According to a notification issued by the Government of India on September 2 last year, a ‘specified bank’ means any scheduled bank. Such banks are those that have been included in the Second Schedule of the Reserve Bank of India (RBI) Act, 1934.