Kolkata: The new financial year is already a couple of weeks old. Soon the date of filing income taxes for FY25 (March 2024-April 2025) will approach. Taxpayers, especially senior citizens and super senior citizens will do well to know which form they will select for filing income tax returns (ITR). There are different ITR forms for different categories of taxpayers and it serves well to have a knowledge of these beforehand.
Senior citizens — who are past 60 — are entitled to a basic exemption limit of Rs 3 lakh according to the Income-Tax Act, 1961. On the other hand, super senior citizens, who are past 80, will have the benefit of a higher exemption limit of Rs 5 lakh. But this higher exemption limit for senior citizens is not available in the new tax regime, where the basic exemption limit is Rs 3 lakh for both categories.
Know your form
If a pensioner has income less than Rs 50 lakh from sources different sources like salary, pension, rental income and interest, he/she must file ITR. However, there may be other scenarios where other sources of income might be active for some taxpayers. For example, if income flows in from capital gains from sale of assets, property, or sources other than salary and pension, one must pick up Form 2 to file income tax return.
There are other forms to submit ITR too — ITR-3 and ITR-4. ITR 3 is applicable for individuals and Hindu Undivided Families who have income/gains from a business or a profession. Experts sometimes also refer to it as a master form since it is a form that an individual/HUF can use to report all possible incomes. On the other hand, ITR 4 is for those who are subject to presumptive taxation under sections 44AD and 44ADA. (Presumptive taxation stipulates that small businesses or professionals may not maintain books of accounts and earnings/profits are presumed to be a certain percentage of total sales for the year, according to which they are taxed.)
Senior citizens must keep in mind that they have to report all sources of income. Apart from pension, many of them have income from rent, interest, dividends and commissions. There must be no under-reporting, not to speak of concealments all of which will invite notices and penalties. Even if they are subjected to tax deducted at source from various sources such as banks while paying Fixed Deposit maturity amounts, senior citizens have to file income tax returns.
Apart from the various tax deductible savings that Section 80C of the Income Tax Act offers, senior citizens can also take advantage of increased deductions such as Section 80D (health insurance premiums) and Section 80TTB (interest income). Senior citizen taxpayers have higher exemption limits than those aged below 60.
For those senior citizens who are in the old income tax regime, an income tax basic exemption limit of Rs 3 lakh is applicable, while that for super senior citizens it is at Rs 5 lakh. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
