Pensioners are generally those who get basic ‘pension’ over the month or in lump-sum amount of or above the official retirement age and to some widows and disabled people.
In India, we tend to know that senior citizens (between the age group of 60 to 80 years) and super senior citizens (above the age of 80 years) get the pension made by the state. Also, if a salaried individual is retired from employment, certainly because of age or ill health, then a pension is paid to them.
Pension is a regular paying amount that helps people to bear their living expenses after retirement. This helps to relieve them from stress of the phase of life, especially for super senior citizens. Pension amount so received is taxable under Income Tax.
However, there are many income tax benefits for senior citizens which are extended by the Income Tax Act, 1961 which readily helps the pensioners in cutting down their income tax liability like higher slab benefits, relief under section 80TTB etc.
Today, here, in the blog, we will discuss income tax for pensioners and how to file ITR with the correct type of ITR-form.
Also Read: How To Open Password Protected Income Tax Return PDF file?
What is Income Tax for Pensioners?
As per Section 60 of the CPC and Section 11 of the Pension Act, Pension is an allowance (periodical) or a stipend given for any past service rendered to an organization and or special merits.
You might be thinking about what’s the correlation between pension and income tax…! Right
See, we know that pensioners are retired individuals and living life with the help of pension amounts. It’s a kind of compensation benefit given by the organization (employer) to an employee for the services he or she has given to the organization.
[Listen carefully] The pension amount which is being given to the pensioner is taxable under Income Tax. While filing ITR, you need to have various documents ready with you like TDS certificate aka Form-16 which lists all your taxable income and various tax deductions at source.
The pension is treated and shown under the head of salary income. Salaried person are allowed a standard deduction of Rs. 50,000 from their salary income. Thus, pensioners are also eligible to get standard deduction of Rs 50,000 from their pension income. This certainly brings relief to pensioners in the form of lower gross taxable income and thereby lower tax.
The most important thing to know while paying your income tax is to choose the correct form/ITR filing suitable form. Here, for pensioners, we will further discuss which type of ITR form to choose for pension-holding people.
Income Tax Form for Pensioners
Which ITR is to be used in filing tax returns? Well, we know that the GOI has notified four major ITR forms which are applicable to Hindu Undivided Family (HUF) and individuals.
For pensioners, Form ITR-1 is the correct form of filing Income Tax Return if they do not have any income other than interest income and income from one house property. ITR-1 is used where the taxable income of salaried taxpayer is Rs. 50 Lakhs or less and also agriculture income does not exceed Rs. 5,000.
In case, the person does not qualify to file ITR with mentioned conditions and does not have business income, then they can use ITR-2.
Further, if a pensioner has income from business or profession as well, then ITR 3 or ITR 4 will have to be used - economictimes
Conclude and say in one statement, ITR 1 and ITR 2 are commonly used for pensioners.
Also Read: How to File an Income Tax Return for a Salaried Employee
Process to File ITR for Pensioners
There is no extra need to put or perform while paying ITR for pensioners. It’s a general and simple process like following to file with ITR Form-1.
Read the mentioned process carefully!
- PART A - Applicant holders need to provide the asked details to fill appropriately in anyhow. The details include the date of birth, name, E-mail address, and other related information.
- PART B - The applicant needs to provide information about Gross Total Income I.e. Salary from income.
- PART C - Here, the applicant needs to mention information about all deductions that have been provided in the form 16.
- PART D - The exact computation of tax along with the status of tax must be provided in this category.
- Under the head “Scheduled IT” there applicant needs to furnish details related to advance tax as well as payments made towards self-assessment tax.
- Under the head “Scheduled TDS1” there the applicant needs to provide details related to TDS from salary.
- Under the head “Scheduled TDS2” the applicant needs to furnish details related to TDS having income sources other than salary.
Note: Applicant also needs to provide details about his running bank account along with IFSC code and the branch and bank code.
After completing the form in a prescribed manner, now you can visit the E-Filing portal to start ITR filing for pensioners after login.
Read More: How to Check, E-Verify & Download ITR Status?
Read More: ITR Filing Guide: How To File Income Tax Return Online Step by Step
