Interest on deposits in case of senior citizens

What are the benefits available in respect of interest on deposits in case of senior citizens?

Section 80TTB of the Income Tax law gives provisions relating to tax benefits available on account of interest income from deposits with banks or post office or co-operative banks of an amount up to Rs. 50,000 earned by the senior citizen (i.e., an individual of the age of 60 years or above). Interest earned on saving deposits and fixed deposit, both shall be eligible for deduction under this provision.

Section 194A of the Income Tax law gives corresponding provisions that no tax shall be deducted at source from payment of interest to a senior citizen up to Rs. 50,000.

What are the benefits available to a senior citizen and very senior citizen in respect of tax rates?

What are the benefits available to a senior citizen and very senior citizen in respect of tax rates?

Senior citizens and a very senior citizen are granted a higher exemption limit as compared to normal taxpayers. Exemption limit is the quantum of income up to which a person is not liable to pay tax. The exemption limit granted to senior citizen and very senior citizen for the financial year 2018-19 is as follows :

Senior citizen

A senior citizen is granted a higher exemption limit compared to non-senior citizens. The exemption limit for the financial year 2018-19 available to a resident senior citizen is Rs. 3,00,000. The exemption limit for the non-senior citizen is Rs. 2,50,000. Thus, it can be observed that an additional benefit of Rs. 50,000 in the form of higher exemption limit is available to a resident senior citizen as compared to normal taxpayers.

Very senior citizen

A very senior citizen is granted a higher exemption limit compared to others. The exemption limit for the financial year 2018-19 available to a resident very senior citizen is Rs. 5,00,000. The exemption limit for the non-senior citizen is Rs. 2,50,000. Thus, it can be observed that an additional benefit of Rs. 2,50,000 in the form of higher exemption limit is available to a resident very senior citizen as compared to normal taxpayers.

Income Tax returns 2018: Deadline is August 31, here’s what happens if you miss it

Income Tax returns 2018: Deadline is August 31, here’s what happens if you miss it

Income Tax returns deadline 2018: The last date for filing the annual income tax return is August 31, 2018. For people in Kerala, the last date has been further extended to September 15.

The last date for filing the annual income tax return (ITR) for the financial year 2018-19 or assessment year 2018-19 was extended by a month to August 31. The only exception for this is Kerala, where the due date has been further extended to September 15 in wake of the severe floods that created havoc in the state.

Exemption of Income Tax on liberalised Family Pension

Exemption of Income Tax on liberalised Family Pension

A case was initiated by PS Dte for exemption of income tax on Liberalised Family Pension in the year 2002. After concerned efforts a Gazette Notification has been issued wef 09 Feb 2005 for exemption of Liberalised Family Pension from the income for purposes of exemption of income tax if death of the member of armed forces

Exemption of TDS From Pension

Exemption of TDS From Pension

Income Tax was hitherto deducted at source from family pensioners by the Pensions Disbursing Agency. Min of Fin (CBDT) has now clarified that family pension does not fall under the category of salary, therefore, no tax is liable to be deducted at source.

INCOME TAX RETURN (ITR 1) FILING ON LINE - AY 2018-19

INCOME TAX RETURN (ITR 1) FILING ON LINE - AY 2018-19

HOW TO FILE INCOME TAX RETURN ITR-1 ON LINE FOR AY 2018-19. 

Step by Step Guide. 

NOTE - One can file ITR on line as explained in this post which is easier method than the other method entailing downloading the xls based micro enabled return forms. These forms can be filled up off line in your own time. You can not make any mistakes since it will prompt you of you have gone wrong. Once complete in all respects incl paying of Self Assessment Tax (so prompted by the programme) the form is converted to XML format with one click of the mouse, This format is then uploaded and you are done. We will soon give the detailed guidelines for this method also soon in this post.

However, the Method of preparing the ITR on line and submitting the ITR is very very simple and a child's play & IN ADDITION TO BEING WITHOUT TEARS AS given step wise in THIS POST.

INTRODUCTION - Income tax returns (ITR) filing: The Income-Tax department has opened an e-filing window for income tax returns (ITR) for assessment year 2018-19 on it's website for salaried employees. Individuals earning income up to Rs 50 lakh are supposed to file ITR 1 form. Other ITR forms are also available for downloads. The Central Board of Direct Taxes (CBDT) had made few changes in ITR forms, including ITR 1 for the current session. 

"For Assessment Year 2018-19, a one page simplified ITR Form-1 (Sahaj) has been notified which can be filed by an individual who is resident other than not ordinarily resident, having income up to Rs 50 lakh, and is receiving income from salary, one house property/other income (BANK interest etc)."

Earlier ITR-1 form was applicable for both residents, residents not ordinarily resident (RNOR) and also NRIs. Now this form is only made available for resident individuals. The revised ITR-1 form also has requirement to furnish a break up of Income under House Property. 

Here's how the structure of ITR-1 form looks like. 

Part A – General Information

Part B – Gross total Income

Part C – Deductions and taxable total income

Part D – Computation of Tax Payable

Part E – Other Information

Schedule IT – Detail of Advance tax and Self Assessment Tax payments

Schedule TDS – Detail of TDS/TCS

THE SIMPLEST METHOD TO FILE YOUR ITR ON LINE IS TO USE THE ON LINE FORM WHICH CAN BE COMPLETED IN A JIFFY.

How to file ITR ONLINE (on Income Tax website) - 

Steps to Start the Process begin Here as under - 

Open web site https://www.incometaxindiaefiling.gov.in , you will see this page:-

Close the page Kind Attention Taxpayers by clicking X on its top right corner, the home page will bare out as under :-

If you are already registered then click on LOGIN other wise first Register your self by clicking on Register and thereby proceeding as per the prompted instructions and filling up your data. Those of you who were with the CAs previously for filing should get the log in details of your acct from him.

Login to e-Filing website with User ID which is PAN Number , Password so created during registration, and Captcha as seen.

Once you are logged in you will see the following page pertaining to your acct :-

Here click on Filing of income Tax Return, you will see the following page, fill up details by selecting from the drop down menus as shown:- (Note - In submission mode select "Prepare and Submit ITR Online" as also select the method for verification of your ITR:-

Before it opens the on line Form for you to fill in , it will ask you to tick mark what all data you wish to have pre-filled from the information already with the department, as shown below.. Here select all boxes so that you save time and effort. The form which will come up will have all data from their server on you and the details of TDS etc so picked from current Form 26AS duly pre-filled. The data pre-filled can be modified by you based on the TDS certificates collected from the deductors.

Select also as to how you will like to have it verified on completion by Aadhaar or by pre-validated net banking account or by obtaining the EVC code from the Bank ATM using your debit card at the banks ATM.

Click on Continue. You will be taken to on line form as under which is your on line ITR for insertion of the remaining details , preview and printing and then submitting/uploading with a click.:-

Open all pages turn by turn and fill up details regarding your income and other details, some of the details would have already been filled up from their server. after filling the data in a page Save it as draft by clicking the button below the page. You can continue here after any time, the draft will remain when ever you open again.

FAMILY PENSION ;- Please note that the family pension is treated as "Income from Other Sources" and is to be shown accordingly. There is a standard deduction of 1/3 of the family pension being received limited to a max of Rs 15000/- U/S 57(iia) which most of the Family pensioners are not aware of. Do claim the same if you have not done earlier. This amount should be deducted from the Family pension and inserted under exempted income. This is shown in the following screen shots.

DISABILITY PENSION - Those in receipt of Disability pension are exempt from Income tax complete as far as Disability and the service elements of pension are concerned. In ITR this total amount be not shown under salaries but under Exempted income towards the end of the ITR with note as " disability pension Armed Forces exempted by CBDT directives" . Make sure that your bank in its Form 16 shows under salaries and does not deduct any TDS on the pension. Your income from other sources will, however be taxed as per normal slabs. 

For your convenience we place here two Screen shots as under showing you the Rows in your utility where Interest on PPF as also disability and std deduction on family pension is shown :-

For those using the Excel utility :-

For those utilising the on line utility :-

After completion of the insertion of your data and the details check that the end result is either Refund or ZERO. In case you are required to pay a prompt will be seen along side on the Taxes Paid and Verification page "E-Pay". YOu will need debit card of specified banks or net banking for payment of Self assessment Tax to make the balance Tax as Zero by clicking and proceeding on clicking E-Pay Tax. After payment of the tax, insert the BSR Code date Challan number and the amount in Taxes page and see that the balance becomes Zero Tax. Click on Save.

After you are satisfied with your return click on the "Preview & Submit" button.. The preview will open and you can print the same , you can go back to correct if any mistakes are there. Once all fine click on SUBMIT button the return will be uploaded and it will get verified as per your selection whether with AAdhaar OTP or by any other method. The confirmation page will come up.

On successful submission, an intimation on your mail will come with attachment containing the ITR-V based on your verification process selected earlier. In case it was verified with Aadhaar OTP, Acknowledgement will be displayed just take a print and thats the end of it. Return Filing process is thus complete and confirmation to the effect will be on your account at efiling.

In case the return is uploaded with the last Verification choice, the ITR-V Form so displayed or supplied should be printed, signed and posted by Speed Post to CPC within 120 days from the date of e-Filing. The return will be processed only upon receipt of signed ITR-V. 

Check your emails/SMS for reminders on .non-receipt of ITR-V.

The notified ITR Forms are available on the official website of the department www.incometaxindia.gov.in. The last date for filing the ITR is Aug 30.

INCOME TAX CHANGES FOR FY 2018-19

INCOME TAX CHANGES FOR FY 2018-19

FIVE Good News for Senior Citizens in Budget as Presented on 01 Feb 2018 applicable for the Fy 2018-19

Budget 2018 has been good budget for Senior Citizens of the country and provided much needed relief. For income tax purpose, any citizens with age of 60 years or more is considered as senior citizen. We discuss the new income tax benefits for senior citizens below:

1. Rs 50,000 Tax exemption on Interest Income from Fixed Deposits and Recurring Deposits u/s 80TTB: The interest rates had come down drastically in last few years and most senior citizens depend on fixed deposits for their regular income. The tax exemption of Rs 50,000 interest income from Post office or Banks under section 80TTB is good move to compensate for the same. However if you take benefit u/s 80TTB then you cannot claim tax benefit on interest received on savings bank account u/s 80TTA. This will lead to saving of Rs 2,600 for 5% tax slab, Rs 10,400 for 20% tax slab and Rs 15,600 for 30% tax slab.

2. Standard Deduction for Pensioners: Budget 2018 has introduced standard deduction of Rs 40,000 for both salaried and pensioners. For salaried this is not much beneficial as medical reimbursement Rs 15000 and transport allowance Rs 19200 have been abolished. But as pensioners did not have these allowances, Rs 40,000 is straight deduction for them!

3. Medical Insurance premium exemption increased u/s 80D: The Medical Insurance premium and the preventive health check-up limit for senior citizens under section 80D has been increased from Rs 30,000 to Rs 50,000.This is good news in keeping with the ever increasing health care and related insurance costs.

4. Deduction for medical treatment of critical illnesses increased u/s 80DDB:

The deduction for medical treatment of specified critical illnesses have been increased to Rs 1 Lakh. Earlier the limit was Rs 60,000 for senior citizens and Rs 80,000 for very senior citizens.

Following illness are covered under section 80DDB:--

• a. Neurological Diseases b. Parkinson’s Disease c. Malignant Cancers d. AIDSChronic e. Renal failure f. HemophiliaThalassaemia
• Interest TDS threshold raised to Rs 50,000 u/s 194A : There is TDS (tax deduction at source) for almost all kind of income. However as a relief to senior citizens Budget 2018 has raised the limit for TDS from Rs 10,000 to Rs 50,000. So TDS would only be applicable for senior citizens if the annual interest income from a bank/post office is more than Rs 50,000.

LIC Pradhan Mantri Vaya Vandhana Yojana extended : Pradhan Mantri Vaya Vandhana Yojana is a government backed pension scheme for senior citizens offering 8% returns. This scheme has now been extended till March 2020. Also the investment limit has been doubled from Rs 7.5 lakhs to Rs 15 lakhs. This is good scheme for senior citizens in lower tax bracket. But remember Senior Citizen Savings Scheme still offers higher interest rate but with shorter lock-in.

Overall this is a good Budget from Senior Citizens perspective and has provided much needed relief