CBDT vide Notification No. 98/2021 in S.O. 3595(E) dated 02.09.2021 notifies ‘specified bank’ for the purpose of tax deduction at source under section 194P of the Income-tax Act, 1961 (“Act”).
Section 194P is introduced by the Finance Act, 2021 in order to provide relief to the senior citizen taxpayers, whose age is 75 years or more, from the filing of income-tax returns if conditions specified therein are fulfilled.
In order to provide relief to senior citizens who are of the age of 75 years or above and to reduce compliance for them, a new section 194P is inserted to provide relaxation from filing the return of income, if the following conditions are satisfied:-
(i) The senior citizen is resident in India and of the age of 75 or more during the previous year;
(ii) He has pension income and no other income. However, in addition to such pension income he may have also have interest income from the same bank in which he is receiving his pension income;
(iii) This bank is a specified bank. The Government will be notifying a few banks, which are banking company, to be the specified bank; and
(iv) He shall be required to furnish a declaration to the specified bank. The declaration shall be containing such particulars, in such form and verified in such manner, as may be prescribed.
Once the declaration is furnished, the specified bank would be required to compute the income of such senior citizen after giving effect to the deduction allowable under Chapter VI-A and rebate allowable under section 87A of the Act, for the relevant assessment year and deduct income tax on the basis of rates in force. Once this is done, there will not be any requirement of furnishing return of income by such senior citizens for this assessment year.
This amendment shall take effect from 1st April, 2021 (AY 2022-23).
Read Also: Exemption to Senior Citizens from filing of Income Tax Return
The CBDT has notified such a ‘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).
Read the full text of Notification No. 98/2021 dated 2.9.2021 on Specified Bank for TDS u/s 194P
MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
NOTIFICATION
New Delhi, the 2nd September, 2021
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,–
1. “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);
2 “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.
[Notification No. 98/2021/F. No. 370142/11/2021-TPL]
ANKIT JAIN, Under Secy. (Tax Policy and Legislation Division)
Download CBDT Notification No. 98/2021 dated 2.9.2021 on Specified Bank for TDS u/s 194P in pdf format
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