Certain banks have been mandated to verify the declaration and deduct tax according to the applicable rates. They will have to provide the information to the income tax authorities. These banks will have to keep this information handy. A procedure for furnishing the particulars to the principal chief commissioner or chief commissioner of income tax will be specified by the principal director general of income tax (systems).
CBDT has issued Form 12BBA, which will be the declaration required to be filled out by the taxpayer when claiming exemption. Senior citizens who do not claim the exemption will have to file their income tax returns as per regular procedure. In a separate notification, the Board mentioned that specified banks in this case would be scheduled banks appointed as agents of the Reserve Bank of India.
This follows a provision announced by finance minister Nirmala Sitharaman in the Union Budget 2021 that permitted people 75 years and older who do not have income other than pension and or interest from savings bank accounts to not file income tax returns.
The conditional relief, which aims to reduce the compliance burden for those above 75, was introduced in the Finance Act earlier this year and has been made applicable from April 1, 2021.
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