New Delhi. The Central Government has taken an important step for senior citizens, especially pensioners, which can reduce their tax related problems to a great extent. Under the new provisions, some elderly people aged 75 years and above are now being relieved from the requirement of filing Income Tax Return (ITR) every year. This change is considered to be implemented from April 2026 and its objective is to provide a simple and respectable tax system to the elderly.
Who will get the benefit?
This facility is not for all senior citizens, but only for those who fulfill certain conditions. To avail the benefit, the person must be 75 years of age or above and must be a resident of India. Apart from this, his income should come from only two sources, pension and interest from the bank.
Another important condition is that both the pension and interest should be deposited in the same bank account which is recognized by the government as ‘Specified Bank’. If a person’s income comes from rent, stock market, business or other means, he will not get the benefit of this exemption.
What is Form 125 and how will it help?
The government has introduced Form No. 125 to ease this process. After filling this form and submitting it to the bank, the bank itself handles most of the tax related work. The bank calculates your total income, deducts applicable exemptions and rebates and deducts tax on the remaining amount and deposits it with the government. In this way, pensioners do not need to file ITR separately or take the help of a tax expert.
Form submission process
This form has to be submitted in the same bank where the pension comes. To keep the process easy, it has been made available in both offline and online modes.
The form can be submitted by visiting the bank branch.
Or can be submitted online through net banking.
The thing to note is that it will be necessary to submit this form once every year.
What to do when there is change in income?
If any new source is added to your income during the year, such as income from selling property, rent or investment, then you will have to immediately inform the bank about it. In such a situation, you may have to update or withdraw your declaration. After this you will have to file ITR yourself as per the normal process.
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