Senior Citizens ITR filing not Mandatory in 2025 | Senior Citizens Tax Benefits
Senior Citizens ITR filing not Mandatory in 2025 but there are certain conditions for this Senior Citizens Tax Benefit. Did you know that filing your Income Tax Return (ITR) might not be mandatory for you? This video breaks down Section 194P of the Income Tax Act and the latest updates from the 2025 Income Tax Bill that simplify tax compliance for certain senior citizens.Here is the complete breakdown:
Video Explanation Senior Citizens ITR filing not Mandatory in 2025
Provisons as per Income tax Act 1961 : for 1st April 2025 t0 31st March 2026( AY 2026-27)
| Feature | Description |
|---|---|
| Section | 194P of Income Tax Act 1961 |
| Subject | Deduction of tax in case of specified senior citizen |
| Applicability | Specified senior citizen |
| Overriding Provision | “Notwithstanding anything contained in the provisions of Chapter XVII-B” – This section overrides other TDS provisions in Chapter XVII-B where applicable. TDS will be deducted and paid by the Bank to the Income Tax Department on the Total Income of the Specified senior citizen as per Section 194P |
| Deduction by | Specified bank |
| Process | The specified bank will: 1. Compute the total income of the specified senior citizen after allowing deductions under Chapter VI-A and rebate under Section 87A. 2. Deduct income tax on such total income based on the rates in force. |
| Key Benefit ( ITR Filing not required) | The provisions of Section 139 (ITR filing) shall not apply to a specified senior citizen for the assessment year in which tax has been deducted under Section 194P(1). . It means Senior Citizens are not required to File Income Tax Return. |
| “Specified Bank” Definition | A banking company as the Central Government may, by notification in the Official Gazette, specify. Govt has issued the Following Notificaiton :- A banking company which is a scheduled bank and has been appointed as agents of the Reserve Bank of India (RBI) under Section 45 of the RBI Act, 1934. (As per Notification S.O. 3595(E) dated 2-9-2021) |
| “Specified Senior Citizen” Definition | An individual, resident in India, who: 1. Is 75 years or more at any time during the previous year. 2. Has income only from pension and interest received/receivable from an account in the same specified bank where they receive their pension. 3. Has furnished a declaration to the specified bank with prescribed particulars, in the prescribed form, and verified as prescribed (refer Form 12BBA). |
| Declaration by Senior Citizen (Form 12BBA) | The specified senior citizen must furnish a declaration to the bank in Form No. 12BBA, in paper form, duly verified. Download Form 12BBA , Income-tax Rules, 1962 |
| Bank’s Computation of Income | The bank computes the total income after giving effect to deductions under Chapter VI-A and rebate under Section 87A. |
| Evidence for Deductions (Chapter VI-A) | Deductions under Chapter VI-A are allowed based on the evidence furnished by the specified senior citizen during the previous year. |
| Maintenance of Records by Bank | The specified bank must properly maintain the declaration (Form 12BBA) and evidence for Chapter VI-A deductions and make them available to the Principal Chief Commissioner/Chief Commissioner of Income-tax when required. |
| Procedure for Furnishing Information by Bank | The Principal Director General/Director General of Income-tax (Systems) will specify the procedure for banks to furnish particulars of Form 12BBA and evidence to the Principal Chief Commissioner/Chief Commissioner of Income-tax. |
Let’s illustrate the application of Section 194P with an example:
Scenario:
Mr. Ramesh is a 78-year-old resident of India. His only income sources are:
- Pension of ₹9,00,000 per year, received from XYZ Bank.
- Interest income of ₹50,000 per year, earned on a fixed deposit account also with XYZ Bank.
XYZ Bank is a scheduled bank and an RBI agent, thus qualifying as a “specified bank.”
Application of TDS
Before deducting any tax, XYZ Bank, as per Clause 393(1) and Table S.No. 8 (iii), calculates Mr. Ramesh’s total income:
- Pension Income: ₹9,00,000
- Interest Income: ₹50,000
- Gross Total Income: ₹9,50,000
- Deductions under Chapter VIII: Let’s assume Mr. Ramesh is eligible for deductions of ₹50,000 under Chapter VIII (e.g., for medical insurance premiums).
- Total Income (after deductions):
- Old Tax Regime ₹9,50,000 – ₹50,000 = ₹9,00,000
- New Tax Regime ₹9,50,000 ( Deductions not allowed)
- Rebate under Section 87A: Let’s assume there is no rebate applicable (since Total Income Exceeds Rs 5 Lakh , if old Regime is Opted.
- Net Taxable Income: ₹9,00,000
Application of Section 194P:
Now, based on this calculated income, XYZ Bank, as per Section 194P, will:
Compute Tax:
i) Old Tax Regime : Calculate the income tax due on ₹9,00,000 according to the applicable tax slabs for senior citizens. Let’s assume, for simplicity, this comes to ₹93,600.
| Income Tax Slab-Old Tax Regime | Tax Rate | Tax |
| upto Rs 300000 | NIL | 0 |
| From Rs 300001 to Rs 500000 | 5% | 10000 |
| From rs 500001 To Rs 1000000 | 20% | 80000 |
| Above Rs 1000000 | 30% | 0 |
| Net Tax | 90000 | |
| Add Education cess @ 4% | 3600 | |
| Total Tax | 93600 |
Deduct TDS: XYZ Bank will deduct ₹93600 as TDS from Mr. Ramesh’s income.
ii) New Tax Regime :
Calculate the income tax due on ₹9,50,000 (The new tax regime does not allow for many deductions.) according to the applicable tax slabs for senior citizens. Let’s assume, for simplicity, this comes to ₹46,800.
| Tax on Normal Inome | ||
| Income Tax Slab-New Tax Regime | Tax Rate | Tax |
| upto Rs 300000 | Nil | 0 |
| From Rs 300001 to Rs 700000 | 5% | 20000 |
| From Rs 700001 To Rs 1000000 | 10% | 25000 |
| From Rs 1000001 To Rs 1200000 | 15% | 0 |
| From Rs 1200001 to Rs 1500000 | 20% | 0 |
| Above Rs 1500000 | 30% | 0 |
| Net Tax | 45000 | |
| Add Education cess @ 4% | 1800 | |
| Total Tax | 46800 |
Deduct TDS: XYZ Bank will deduct ₹46800 as TDS from Mr. Ramesh’s income.
ITR Filing:
Because the tax has been deducted by the bank under Section 194P, and his income sources are limited to pension and interest from the same bank, Mr. Ramesh is not required to file an Income Tax Return (ITR). This is now explicitly stated in the Income tax Act . The bank’s TDS covers his tax liability.
Key Points Illustrated for Senior Citizens ITR filing :
- Income Calculation First: section 194P ensures the bank correctly calculates Mr. Ramesh’s income before deducting TDS. This is essential for accurate tax deduction.
- TDS and Exemption: Section 194P mandates the bank to deduct TDS based on the income calculated and provides the ITR filing exemption.
- Simplified Process: This system simplifies tax compliance for senior citizens like Mr. Ramesh, relieving them of the burden of filing an ITR. The bank handles the TDS, and he’s exempt from filing as long as his income sources meet the criteria.
- Explicit Exemption: The income tax act makes it completely clear that Mr. Ramesh doesn’t need to file an ITR in this situation.
This example demonstrates how these provisions work together to ensure tax compliance for specified senior citizens in a streamlined and convenient manner.
Provison in New Income Tax Bill 2025 from Tax year 2026-27 (1st April 2026 to 31 March 2027) for Senior Citizens ITR filing
Here’s the table updated with the new ITR filing provision from the 2025 Income Tax Bill:
| Feature | Income Tax Act 1961 Section 194P
| Income Tax Bill 2025 Clause 393(1) [Table: S.No. 8(iii)] () |
|---|---|---|
| Purpose | Deduction of tax at source (TDS) from income of specified senior citizens | Calculation of total income for TDS by the bank |
| Action | Specifies the TDS process | Specifies income calculation for TDS |
| Focus | TDS mechanism & ITR filing exemption | Income calculation for TDS and TDS mechanism & ITR filing exemption |
| “Specified Senior Citizen” Definition | Resident Indian, 75+ years, pension & interest (same bank), declaration furnished | Resident Indian, 75+ years, pension & interest (same bank), declaration furnished |
| Income Considered | Pension & interest (same bank) | Pension & interest (same bank) |
| Declaration | Required | Required |
| Deductions Considered | Chapter VI-A deductions & Section 87A rebate | Chapter VIII deductions & Section 156 rebate |
| ITR Filing | Exempts from filing ITR (Section 139) | Explicitly states ITR filing is not required for specified senior citizens as defined in Section 402(39) when tax is deducted under Section 393(1) [Table: Sl. No. 8 (iii)]. |
| “Specified Bank” Definition | Defined (Scheduled bank & RBI agent) | “specified bank” means a banking company as the Central Government may, by notification, specify; |
| Key Difference | Act of TDS & ITR filing exemption | Income calculation for TDS and & ITR exemption |
Key Change:
The 2025 Income Tax Bill, through the added clause related to Section 393(1), now explicitly states that ITR filing is not required for specified senior citizens when tax is deducted at source under Section 393(1) [Table: Sl. No. 8 (iii)]. While the exemption was already implied due to Section 194P, the new language removes any ambiguity and makes the exemption crystal clear. This is a significant improvement in clarity for senior citizens.
List of Schedule Bank as per RBI act 1964
[THE SECOND SCHEDULE
[See section 42 and section 2(e)]
SCHEDULED BANKS
AB Bank Ltd.
Abhyudaya Co-operative Bank Ltd., Mumbai
Abu Dhabi Commercial Bank Ltd.
Ahmedabad Mercantile Co-Op Bank Ltd.
Airtel Payments Bank Limited
Amanath Co-operative Bank Ltd. Bangalore
American Express Banking Corporation
Andhra Pradesh Grameena Vikas Bank
Andhra Pradesh Mahesh Co-Op Urban Bank Ltd.
Andhra Pragathi Grameena Bank
Apna Sahakari Bank Ltd.
Arunachal Pradesh Rural Bank
Aryavart Bank
Assam Gramin Vikash Bank
Au Small Finance Bank Limited
Australia and New Zealand Banking Group Ltd.
Axis Bank Limited
Bandhan Bank Limited
Bangiya Gramin Vikas Bank
Bank of America
Bank of Bahrain & Kuwait BSC
Bank of Baroda
Bank of Ceylon
Bank of China
Bank of India
Bank of Maharashtra
Bank of Nova Scotia
Barclays Bank Plc.
Baroda Gujarat Gramin Bank
Baroda Rajasthan Kshetriya Gramin Bank
Baroda UP Bank
Bassein Catholic Co-operative Bank Ltd.
Bharat Co-operative Bank (Mumbai) Ltd., Mumbai
Bharati Sahakari Bank Limited.
BNP Paribas
Bombay Mercantile Co-operative Bank Limited
Canara Bank
Capital Small Finance Bank Limited
Central Bank of India
Chaitanya Godavari Grameena Bank
Chhattisgarh Rajya Gramin Bank
Citibank N.A.
Citizen Credit Co-operative Bank Ltd., Mumbai
City Union Bank Limited
Cooperatieve Rabobank U.A.
Cosmos Co-operative Bank Ltd
Credit Agricole Corporate & Investment Bank
Credit Suisse A.G
CSB Bank Limited
CTBC Bank Co., Ltd.
Dakshin Bihar Gramin Bank
DBS Bank India Limited
DCB Bank Limited
Deutsche Bank
Dhanlaxmi Bank Limited
Doha Bank Q.P.S.C
Dombivli Nagari Sahakari Bank Ltd.
Ellaquai Dehati Bank
Emirates Bank NBD
Equitas Small Finance Bank Limited
ESAF Small Finance Bank Limited
Federal Bank Limited
FINCARE Small Finance Bank Limited
Fino Payments Bank Limited
First Abu Dhabi Bank PJSC
FirstRand Bank Ltd
G. P. Parsik Janata Sahakari Bank Ltd., Thane
Goa Urban Co-operative Bank Limited.
Greater Bombay Co-operative Bank Limited
GS Mahanagar Co-operative Bank Ltd., Mumbai
Gujarat State Co-operative Bank Ltd.
HDFC Bank Limited
Himachal Pradesh Gramin Bank
HSBC Ltd
ICICI Bank Limited
IDBI Bank Limited
IDFC FIRST Bank Limited
India Post Payments Bank Limited
Indian Bank
Indian Mercantile Co-operative Bank Ltd.
Indian Overseas Bank
IndusInd Bank Limited
Industrial & Commercial Bank of China Ltd
Industrial Bank of Korea
J.P. Morgan Chase Bank N.A.
J&K Grameen Bank
Jalgaon Janata Sahakari Bank Ltd.
Jalgaon People’s Co-operative Bank Ltd.
Jammu & Kashmir Bank Limited
Jana Small finance Bank Limited
Janakalyan Sahakari Bank Ltd., Mumbai
Janalaxmi Co-operative Bank Ltd., Nashik
Janata Sahakari Bank Ltd., Pune.
Jharkhand Rajya Gramin Bank
JSC VTB Bank
Kallappanna Awade Ichalkaranji Janata Sahakari Bank Ltd.
Kalupur Commercial Coop.Bank Ltd.
Kalyan Janata Sahakari Bank Ltd., Kalyan
Kapol Co-operative Bank Ltd., Mumbai
Karad Urban Co-operative Bank Ltd.
Karnataka Bank Limited
Karnataka Gramin Bank
Karnataka Vikas Grameena Bank
Karur Vysya Bank Limited
KEB Hana Bank
Kerala Gramin Bank
Kookmin Bank
Kotak Mahindra Bank Limited
Krung Thai Bank Public Co. Ltd.
Madhya Pradesh Gramin Bank
Madhyanchal Gramin Bank
Maharashtra Gramin Bank
Manipur Rural Bank
Mashreq Bank PSC
Meghalaya Rural Bank
Mehsana Urban Co-Op Bank Ltd.
Mizoram Rural Bank
Mizuho Bank Ltd.
MUFG Bank, Ltd.
Nagaland Rural Bank
Nagar Urban Co-operative Bank Ltd., Ahmednagar
Nagpur Nagrik Sahakari Bank Ltd.
Nainital Bank Limited
Nasik Merchant’s Co-operative Bank Ltd.
NatWest Markets Plc
New India Co-operative Bank Ltd., Mumbai
NKGSB Co-operative Bank Ltd., Mumbai
North East Small Finance Bank Limited
Nutan Nagarik Sahakari Bank Ltd., Ahmedabad
Odisha Gramya Bank
Paschim Banga Gramin Bank
Paytm Payments Bank Limited
Prathama UP Gramin Bank
Pravara Sahakari Bank Ltd.
PT Bank Maybank Indonesia TBK
Puduvai Bharathiar Grama Bank
Punjab & Sind Bank
Punjab Gramin Bank
Punjab National Bank
Qatar National Bank (Q.P.S.C.)
Rajarambapu Sahakari Bank Ltd.
Rajasthan Marudhara Gramin Bank
Rajkot Nagrik Sahakari Bank Ltd.
RBL Bank Limited
Rupee Co-operative Bank Ltd.
Sangli Urban Co-operative Bank Ltd., Sangli
Saptagiri Grameena Bank
Saraswat Co-operative Bank Ltd., Bombay
Sarva Haryana Gramin Bank
Saurashtra Gramin Bank
Sberbank
SBM Bank (India) Limited
SBPP Co-operative Bank Ltd., Killa Pardi, Dist Valsad (Gujarat)
Shamrao Vithal Co-operative Bank Ltd.
Shikshak Sahakari Bank Ltd., Nagpur.
Shinhan Bank
Shivalik Small Finance Bank Limited
Sikkim State Co-operative Bank Ltd.
Societe Generale
Solapur Janata Sahakari Bank Ltd.
Sonali Bank Ltd.
South Indian Bank Limited
Standard Chartered Bank
State Bank of India
Sumitomo Mitsui Banking Corporation
Surat Peoples Coop Bank Ltd.
Suryoday Small Finance Bank Limited
Tamil Nadu Grama Bank
Tamilnad Mercantile Bank Limited
Telangana Grameena Bank
Thane Bharat Sahakari Bank Ltd.
The Akola Janata Commercial Co-operative Bank Ltd., Akola.
The Akola Urban Co-operative Bank Ltd., Akola.
The Andhra Pradesh State Co-operative Bank Ltd.
The Bihar State Co-operative Bank Ltd.
The Chhatisgarh Rajya Sahakari Bank Maryadit
The Delhi State Cooperative Bank Ltd.
The Goa State Co-operative Bank Ltd.
The Haryana State Co-operative Apex Bank Ltd.
The Himachal Pradesh State Co-operative Bank Ltd.
The Karnataka State Co-operative Apex Bank Ltd.
The Kerala State Co-operative Bank Ltd.
The Khamgaon Urban Co-operative Bank Ltd., Khamgaon.
The Madhya Pradesh Rajya Sahakari Bank Maryadit
The Maharashtra State Co-operative Bank Ltd.
The Meghalaya Co-operative Apex Bank Ltd.
The Odisha State Co-operative Bank Ltd.
The Puducherry State Co-operative Bank Ltd.
The Punjab State Co-operative Bank Ltd.
The Rajasthan State Co-operative Bank Ltd.
The Tamil Nadu State Apex Co-operative Bank Ltd.
The Telangana State Cooperative Apex Bank Ltd.
The Uttar Pradesh Co-operative Bank Ltd.
The Uttarakhand State Co-operative Bank Ltd.
The West Bengal State Co-operative Bank Ltd.
TJSB Sahakari Bank
Tripura Gramin Bank
Tripura State Co-operative Bank Ltd.
UCO Bank
Ujjivan Small Finance Bank Limited
Union Bank of India
United Overseas Bank Ltd
Unity Small Finance Bank Limited
Utkal Grameen bank
Utkarsh Small Finance Bank Limited
Uttar Bihar Gramin Bank
Uttarakhand Gramin Bank
Uttarbanga Kshetriya Gramin Bank
Vasai Vikas Sahakari Bank Ltd.
Vidharbha Konkan Gramin Bank
Woori Bank
YES Bank Limited
Zoroastrian Co-operative Bank Ltd., Bombay
Refer IncomeTax India website