A senior citizen over 60 years of age can now furnish Form 15H and declare their annual income below the exemption limit.
The Form 15H must be submitted by any person who makes a payment to a senior citizen. Upon submission of the Form 15H, the senior citizens are entitled to receive their income without deduction of tax (TDS).
A notification issued by the CBDT has amended Form 15H to allow senior citizens to avail the benefit of furnishing it even if their income exceeds the basic exemption limit. Senior citizens whose tax liability is nil after claiming rebate under section 87A are entitled to receive payments without TDS.
The amendment is effective for the financial year 2019-20 (AY 2020-21). The amendment benefits senior citizens whose net taxable income is up to Rs 5,00,000.
Let’s take a look at an example to understand this change in Form15 better. Mr X is 62 years of age and earns income from pension and interest on fixed deposit totalling to Rs 5,20,000. Mr X claims deductions for life insurance premium paid of Rs 20,000. Thus, his total income is Rs 5,00,000. In this case, Mr X can furnish form 15H to both his employer paying pension and the bank paying interest and obtain the incomes without TDS.
The above amendment is as per the amendment made in the Budget 2019 granting a total tax rebate under section 87A for net taxable income up to Rs 5,00,000.