Govt eases tax rules for senior citizens’ scheme

NEW DELHI: Senior citizens will find it more comfortable to invest in the popular Senior Citizens Savings Scheme, with the government moving the onus of tax payments to them, instead of compulsory deduction by banks.

Retired people above 65 can now ask their banks or post offices, not to deduct any tax on their interest income at source under the scheme. A clarification issued by the finance ministry on Friday says the declaration in Form 15H is for individuals above 65 years, whose aggregate tax liability on their total estimated annual income is nil.

There is relief for subscribers below 65 years too. They can also fill in a similar declaration (Form 15G), saying that their tax liability for the year was nil and their interest income was less than Rs 1,00,000.

For women subscribers, the upper limit for the exemption, works out to Rs 1,35,000. The clarification comes after several banks sent out notices to subscribers to the Senior Citizens Savings Scheme, asking them to furnish tax returns on their interest earnings.