This financial year is about to end and the government has planned some major changes for the next financial year which starts from April 1.
During the Budget 2021 presentation, Union Finance Minister Nirmala Sitharaman had made certain announcements, including changes in ITR for senior citizens. From the new fiscal, TDS (Tax Deducted at Source) will get changed.
From April 1, if a person doesn't file income tax return (ITR), then the TDS interest rate on bank deposits would be charged double. That means if an earning individual doesn't fall in the income tax outgo slab, if he or she doesn't file ITR, then the TDS rate will double on the earning individuals.
Elaborating on the new rule, SEBI registered tax and investment expert Jitendra Solanki said, "In order to discourage the practice of not filing income tax returns by the persons in whose case a substantial amount of tax has been deducted or collected, the union budget proposal says that a person in whose case TDS/TCS of Rs 50,000 or more has been made for the past two years and who has not filed ITR, the rate of TDS/TCS shall be at the double of the specified rate or 5 per cent, whichever is higher. This provision shall not be applicable for the transactions where the full amount of tax is required to be deducted e.g. salary income, payment to non-resident, lottery, etc."
On whether the TDS interest rate would be applicable on the senior citizens who are more than 75 years, Pankaj Mathpal, Managing Director, Optima Money Managers said, "Budget 2021 allows non-filing of ITR for those super senior citizens who have a single income source of pension. If a 75 plus-year-old person has a source of income other than pension too, then, in that case, the super senior citizen will have to file ITR and avoid double TDS interest rate charge being levied on them."
In Budget 2021, the government brought a huge relief to senior citizens with the announcements that people aged above 75 years will not have to file their income tax returns. The government also announced that no tax will be levied on pensioners over 75 years of age and tax cases older than 3 years will not be opened.