The government offers tax breaks to senior citizens. Senior citizens are excluded from paying TDS on FD interest under this provision. You must first complete a few crucial tasks if you too wish to avoid paying 10% TDS.
At the start of the fiscal year, senior citizens should submit the self-declaration form to their bank. These comprise Forms 15G and 15H.
The taxpayer may ask the bank to stop deducting tax on interest if the taxable income is below the threshold for tax exemption. Seniors who are 75 years of age or older and do not want to file an income tax return can now send Form 12BBA to their bank.
Who is eligible for the discount?
Only those senior citizens who only get interested in fixed deposits and pensions are exempt from filing an income tax return. The pension must be held in the same bank as the fixed deposit, which is the second requirement. Form 12BBA requires the completion of numerous fields. These comprise information regarding tax deductions under sections 80C through 80U, tax refunds under section 87A, and the total income from interest from fixed deposits and money market accounts.
The bank determines the taxpayer’s total income when the form is filed, according to the Central Board of Direct Taxes. He takes tax deductions and rebates under section 87A into consideration for this and subtracts tax from final income at the applicable slab rate.
The CBDT has made sure that completing this form shouldn’t provide any difficulties. It has therefore requested that banks assist senior folks in filling out the form.
The bank will essentially file Income Tax Returns (ITR) for senior citizen taxpayers. This move by CBDT is excellent. Actually, because income tax laws are always changing, senior folks find it challenging to file an ITR.
Why is submitting a 12BBA important?
Senior citizens do not need to worry about getting their tax deductions for FD interest back when they complete Form 12BBA, which is another benefit. In accordance with income tax regulations, if a senior citizen 60 years of age or over receives interest income totaling more than Rs 50,000 in a fiscal year, the bank will deduct 10% TDS from that amount.
Money from taxpayers who fall between the 5% and 10% income tax bands will be used for TDS. For instance, if a guy earns Rs 7 lakh in interest income, he will lose Rs 70,000 due to 10% TDS. The taxpayer must pay Rs 52,500 in tax if he submits Form 12BBA. Taxpayers will receive a refund of Rs 17,500 if they do not complete Form 12BBA.
News Mania Desk
