Specially Senior Citizen Tax payee Income source are as Pension, Interest, Rent, etc. and many more. In case Tax payee total income exceeds the aforesaid limit, Sr. Citizen Tax payee would be required to file Income Tax Return and in case it does not, assessee would not be required to file the tax return. It means total income exceeds Rs 3 lakh, being the maximum amount up to which tax is not payable by a senior citizen for assessment year 2015-16 (financial year 2014-15).
Section 194A of the Income-tax Act 1961 (The Act) provides that tax deduction provisions shall not be applicable to such income credited or paid in respect of:-
- Deposits with a primary agricultural credit society or a primary credit society or a cooperative land mortgage bank or cooperative land development bank.
- Deposits (other than time deposits made on or after July 1, 1995) with a cooperative society, other than cooperative society or bank referred to in (a) above, engaged in carrying on the business of banking.
Tax payee may, therefore, find out whether the cooperative societies in which fixed deposit etc; have been made are covered within the aforesaid exemption. In case such societies are not covered within the aforesaid exemption, deduction of tax will have to be made in respect of the interest income provided the same exceeds the limit prescribed under Section 194A of the Act.
According to the provisions of Section 80TTA of the Act, a deduction to the extent of Rs 10,000 is allowable in respect of the interest earned in a savings account with (a) bank, (b) cooperative society carrying on the business of banking and (c) post office. In that case Tax payee can claimed a deduction of Rs 10,000 in respect of interest earned in savings account instead of more than exemption limit up to March 31, 2016 and claim such deduction.