CBDT clarifies the term ‘Specified Bank’ for the purpose of TDS u/s 194P in the case of Specified Senior Citizens (of age 75 or more having pension/ interest income only), who have been exempted from filing of ITR u/s 139, in respect of FY 2021-22/ AY 2022-23 and onwards.
CBDT Income Tax Notification 98/2021 dt. 02/09/2021: CBDT clarifies ‘Specified Bank’ u/s 194P (Senior Citizens TDS: ITR Filing Exemption)
S.O. 3595(E).- In exercise of the powers conferred by clause (a) of Explanation to section 194P of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies specified Bank to mean a banking company which is a scheduled bank and has been appointed as agents of Reserve Bank of India under section 45 of the Reserve Bank of India Act, 1934 (2 of 1934).
Explanation: For the purpose of this notification,-
i) “banking company” shall have the meaning assigned to it in clause (a) of section 45A of the Reserve Bank of India Act, 1934 (2 of 1934);
ii) “scheduled bank” shall have the meaning assigned to it in clause (e) of section 2 of the Reserve Bank of India Act, 1934 (2 of 1934).
2. This notification shall come into force from the date of publication in the Official Gazette.
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IT Section 194P (inserted by FA 2021): Deduction of tax in case of specified senior citizen
Notwithstanding anything contained in the provisions of Chapter XVII-B, in case of a specified senior citizen, the specified bank shall, after giving effect to the deduction allowable under Chapter VI-A and rebate allowable under section 87A, compute the total income of such specified senior citizen for the relevant assessment year and deduct income-tax on such total income on the basis of the rates in force.
(2) The provisions of section 139 shall not apply to a specified senior citizen for the assessment year relevant to the previous year in which the tax has been deducted under sub-section (1).
Explanation.- For the purposes of this section,-
(a) “specified bank” means a banking company as the Central Government may, by notification in Official Gazette, specify;
(b) “specified senior citizen” means an individual, being a resident in India-
(i) who is of the age of seventy-five years or more at any time during the previous year;
(ii) who is having income of the nature of pension and no other income except the income of the nature of interest received or receivable from any account maintained by such individual in the same specified bank in which he is receiving his pension income; and
(iii) has furnished a declaration to the specified bank containing such particulars, in such form and verified in such manner, as may be prescribed.
Clause (a) of Section 45A of the RBI Act, 1934: Definitions
(a) ‘‘banking company’’ means a banking company as defined in section 5 of the Banking Regulation Act, 1949, and includes the State Bank of India, any subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959, any corresponding new bank constituted by section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, and any other financial institution notified by the Central Government in this behalf;
Clause (e) of Section 2 of the Reserve Bank of India Act, 1934: Definitions
(e) “scheduled bank” means a bank included in the Second Schedule;
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New IT Rule 26D: Furnishing Declaration/ Evidence of Claims by Senior Citizens (Form 12BBA) u/s 194P