The exemption is only for those citizens whose source of income is FD interest and pension. Senior citizens can fill and submit this form to avoid the hassle of refund after deducting TDS.
New Delhi. Senior citizens of 75 years of age and above who want to get exemption from income tax from this year onwards submit Form 12BBA with their respective banks. If your income comes only from interest earned from pension or fixed deposits, then you are eligible for this income tax exemption. Another condition for this is that your pension and interest should come in the same bank account.
In Form 12BBA, many details are asked from you, so this form may seem a bit difficult. In this, you will get details related to tax exemption under section 80C to section 80U, details of tax exemption under section 87A (bringing taxable income below 5 lakhs) and giving details of income from interest on pension and FD. Will happen.
Bank will decide the deduction after review
According to the Central Board of Direct Taxes (CBDT), after submission of the form, the bank will calculate the total income of the taxpayer after considering tax deduction and exemption under section 87A and deduct tax on the income as per slab. Since this is a very complicated form, to ensure that senior citizens do not face difficulty in filling the form, CBDT has directed the banks to assist the eligible senior citizens in filling the form. Along with this, the bank will compulsorily file ITR on behalf of the senior citizen taxpayer.
Avoid the hassle of 10% TDS deduction
Karan Batra, founder, CharteredClub.com says that as per the IT laws, 10 per cent TDS is deducted on income above Rs 50,000 earned by a senior citizen of age 60 years and above by interest. In this case, the income tax payer in the slab of 5-10 percent will have to pay more tax than his slab. For example, if someone has an income of Rs 7 lakh by way of interest, then he will pay TDS of Rs 70,000 on it, but by filling Form 12BBA, he will have to pay only Rs 52,500. It is worth noting that after deducting 70,000 TDS, you will have to apply for a refund.
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