Another advantage of submitting Form 12BBA is that senior citizens do not have to worry about refund of tax deducted on FD interest.
Taxpayers are required to submit a specific self-declaration form to the bank at the beginning of the financial year. These include Form 15G and Form 15H ৷ If the taxable income is less than the tax-free limit, the taxpayer can request the bank not to deduct tax on interest. From this year, senior citizens aged 75 years and above who do not wish to file an income tax return can submit Form 12BBA to their bank.
Exemption from filing income tax returns is only available to such senior citizens who have income only from pension and interest on fixed deposits. The second condition is that the pension and the fixed deposit must be in the same bank. There is a lot to fill in Form 12BBA. These include details of deductions under section 80C to section 80U, tax exemptions under section 87A and total income from fixed deposits and interest on FDs.
Read more: Unemployment Bhatta: Unemployed people in this state get money from the government, learn how to take advantage
According to the Central Board of Direct Taxes, after submitting the form, the bank calculates the total income of the taxpayer. For this he considers tax deduction and exemption under section 87A and deducts tax from the final income as per slab rate. The CBDT has taken care to ensure that there is no problem in filling up this form. For this, it has asked the banks to help the senior citizens to fill up the forms.
Similarly, banks will file income tax returns (ITRs) on behalf of senior citizen taxpayers. This step of CBDT is very good. In fact, it is difficult for senior citizens to file ITRs, as income tax rules change.
Another advantage of submitting Form 12BBA is that senior citizens do not have to worry about tax refund deducted on FD interest. According to the income tax rules, if a senior citizen aged 60 years and above has an interest income of more than Rs 50,000 in a financial year, the bank will deduct 10 per cent TDS on it.
Taxpayers who fall into the 5 percent and 10 percent income tax slabs, a lot of their money will go to TDS. For example, if a person has an interest income of Rs 7 lakh, then according to 10 per cent TDS, he will lose Rs 70,000. If the taxpayer submits Form 12BBA, he will have to pay tax of Rs.52,500. Taxpayers who do not complete Form 12BBA will get a refund of Rs 17,500.