Old Act vs New Act — Which Applies When?
Before understanding the ITR exemption, you need to understand which law applies when:
| Filing Year | Financial Year | Act That Applies | Relevant Section | Declaration Form |
| 2026 (filing now) | FY 2025-26 (AY 2026-27) | Old Income Tax Act, 1961 | Section 194P | Form 12BBA |
| 2027 (filing next year) | FY 2026-27 (TY 2026-27) | New Income Tax Act, 2025 | Section 393 | Form 125 |
IMPORTANT
If you are filing your ITR right now in 2026, the old act still governs you. The new Income Tax Act 2025 kicks in from Tax Year 2026-27 onwards, and those returns will be filed in 2027. The exemption exists under both acts — only the section number and form have changed.
Who Does NOT Need to File ITR in 2026?
The Income Tax Act provides a special carve-out for elderly taxpayers. Under this provision, the bank files your return on your behalf — you are completely free from the obligation of filing ITR yourself.
But this exemption is not automatic and not universal. You must satisfy every single condition listed below.
All 5 Conditions That Must Be Met Simultaneously
| # | Condition | Details |
| 1 | Age | You must be 75 years or above as on 31 March of the financial year |
| 2 | Residency | You must be a Resident Indian — NRIs are NOT eligible |
| 3 | Income Type | Your only income must be pension and/or interest from deposits |
| 4 | Same Bank | Your pension AND interest income must come from the same specified bank |
| 5 | Declaration | You must submit the prescribed declaration form (Form 12BBA or Form 125) to that bank |
If even one condition is not met, you must file ITR yourself.
Why Most Senior Citizens Are NOT Eligible
This is the part that most people miss. On paper, the exemption sounds generous — “75+ seniors don’t need to file ITR.” In reality, the majority of senior citizens cannot avail this benefit. Here’s why:
Reason 1: Income from Multiple Sources
Most senior citizens don’t earn from pension alone. They typically have:
- Fixed deposits in multiple banks (not just one)
- Rental income from property
- Dividend income from shares or mutual funds
- Capital gains from selling property or investments
- Interest from Post Office schemes (which is a different institution, not the pension bank)
- Agricultural income
Any income beyond pension + interest from the same bank immediately disqualifies you.
Reason 2: Pension and FDs in Different Banks
This is the most common disqualifier. Many retirees:
- Receive pension in Bank A (e.g., SBI)
- Have fixed deposits in Bank B (e.g., HDFC) or Bank C (e.g., Post Office)
The condition requires both pension and interest to flow through the same bank. If your FD is in a different bank than your pension account, you do not qualify.
Reason 3: Age Below 75
The exemption is not for all senior citizens. The age criterion is specifically 75 years and above — not 60+, not 65+.
| Age | Classification | ITR Exemption? |
| 60-74 years | Senior Citizen | ❌ Must file ITR |
| 75-79 years | Senior Citizen | ✅ Eligible (if other conditions met) |
| 80+ years | Super Senior Citizen | ✅ Eligible (if other conditions met) |
| Below 60 | Regular Individual | ❌ Must file ITR |
Reason 4: NRI Status
Many senior citizens live abroad with their children but continue receiving pension and interest in India. Since the condition requires you to be a Resident Indian, NRI senior citizens must file their own ITR regardless of age.
Reason 5: Want to Claim Refund
If TDS has been deducted on your income and you want a refund (because your total income is below taxable limits), you must file ITR yourself. The bank’s filing mechanism is designed for cases where the correct tax has been deducted — not for claiming refunds on excess TDS from other sources.
WARNING
Do not assume you are exempt just because you are 75+. Verify every condition. If you have even ₹1 of rental income, or a single FD in a different bank, you must file ITR on your own.
How Section 393 Works (Step-by-Step)
Here is the exact process for senior citizens who do qualify for the ITR exemption:
Step 1: Verify Your Eligibility
Confirm that:
- You are 75 years or above
- You are a Resident of India
- Your only income is pension + interest from deposits
- Both come from the same bank
Step 2: Download the Declaration Form
| For Returns Filed In | Form to Use | Download From |
| 2026 (AY 2026-27) | Form 12BBA | incometax.gov.in (old forms section) |
| 2027 onwards (TY 2026-27+) | Form 125 | incometaxindia.gov.in → Tax Laws & Rules → Forms Downloads → Income Tax Forms 2026 |
Step 3: Fill the Declaration Form
Form 125 (the new form) is a short, simple document. Here is what you need to provide:
| Field | What to Fill |
| Full Name | Your name as per PAN |
| Address | Complete residential address |
| PAN Number | Your 10-digit PAN |
| Date of Birth | Your DOB (to verify 75+ age) |
| Tax Year | 2026-27 (for current cycle) |
| Email ID | Your active email |
| Contact Number | Your mobile number |
| Name of Specified Bank | The bank where you receive pension AND interest |
| Name of Employer | The employer from which pension is drawn |
| PPO Number | Pension Payment Order number (found on your pension slip) |
| Bank Account Details | Account number(s) — specify if individual or joint |
| New Regime Opt-Out? | “No” = stay in new regime; “Yes” = choose old regime |
Step 4: Submit to Your Bank
Print the form, sign it, and submit it at your bank branch. The bank will:
- Verify your details and income
- Calculate your tax liability based on your chosen regime
- Deduct TDS if any tax is due
- File your ITR on your behalf
Step 5: You’re Done
No portal login needed. No CA fees. No deadline stress. The bank handles everything.
What the Bank Does With Your Declaration
Once you submit Form 125 (or 12BBA), the bank takes over your compliance burden:
You submit Form 125
↓
Bank verifies your income details
↓
Bank asks: Old Regime or New Regime?
↓
Bank calculates total tax liability
↓
If tax is due → Bank deducts TDS
↓
Bank files your ITR with the Income Tax Department
↓
You receive acknowledgement — no further action needed
TIP
Submit your declaration form early in the financial year (April-May). This gives the bank enough time to process your details correctly and ensures accurate TDS deduction throughout the year.
Section 194P vs Section 393: What Changed?
The core benefit remains identical. Only the legal reference and form number have changed under the new Income Tax Act 2025:
| Aspect | Old Act (1961) | New Act (2025) |
| Section | 194P | 393 |
| Full Reference | — | Sec 393(1), Table Sr. No. 8, Item 3 |
| Declaration Form | Form 12BBA | Form 125 |
| Opt-Out Section | Sec 115BAC (new regime) | Sec 202 (new regime under new act) |
| Age Criteria | 75+ | 75+ (unchanged) |
| Residency | Resident only | Resident only (unchanged) |
| Income Restriction | Pension + Interest (same bank) | Pension + Interest (same bank) (unchanged) |
Bottom line: If you were using Form 12BBA under Section 194P, you will now use Form 125 under Section 393 for returns filed from 2027 onwards. The eligibility rules have not changed — only the section numbers.
Other Tax Benefits Senior Citizens Should Know
Even if you do need to file ITR, you still get several exclusive benefits:
No Tax Up to ₹12.75 Lakh (New Regime)
Under the new tax regime, income up to ₹12 lakh is tax-free thanks to the Section 87A rebate. For pension or salary earners, the ₹75,000 standard deduction pushes this to ₹12,75,000 effectively.
Example:
| Income | Amount |
| Pension | ₹8,00,000 |
| FD Interest | ₹4,75,000 |
| Gross Total | ₹12,75,000 |
| Less: Standard Deduction | −₹75,000 |
| Taxable Income | ₹12,00,000 |
| Tax | ₹60,000 |
| Less: Sec 87A Rebate | −₹60,000 |
| Tax Payable | ₹0 |
No TDS on FD Interest Up to ₹1 Lakh
Banks do not deduct TDS if your total interest income in a financial year is ₹1 lakh or below. For regular individuals, this limit is only ₹40,000.
If interest exceeds ₹1 lakh but your total income is still below taxable limits, submit Form 121 (which replaces the old Form 15G/15H) to prevent TDS deduction.
No Advance Tax Obligation
Senior citizens without business income are exempt from paying advance tax — even if their annual tax liability exceeds ₹10,000. You can pay the entire tax at the time of filing your return.
Higher Deductions Under Old Regime
| Section | Benefit | Regular Limit | Senior Citizen Limit |
| 80D | Health insurance premium | ₹25,000 | ₹50,000 |
| 80DDB | Treatment of specified diseases | ₹40,000 | ₹1,00,000 |
| 80TTB | Interest from deposits | ₹10,000 (80TTA) | ₹50,000 |
| Basic Exemption | Tax-free slab (old regime) | ₹2,50,000 | ₹3,00,000 (60-79) / ₹5,00,000 (80+) |
Key Takeaways
| Question | Answer |
| Who doesn’t need to file ITR? | Senior citizens aged 75 and above — but only if strict conditions are met |
| What is the legal basis? | Section 194P (old act, for ITR filed in 2026) → Section 393 (new act, for ITR filed from 2027) |
| Who files the return instead? | Your bank — after you submit a declaration form |
| Which form to submit? | Form 12BBA (for AY 2026-27) → Form 125 (from AY 2027-28 onwards) |
| Can everyone 75+ avail this? | No. Most senior citizens do NOT qualify because of the strict conditions |
| What income is allowed? | Only pension + interest — and both must come from the same bank |
When Must You File ITR Despite Being 75+?
Even if you are over 75, you must file ITR yourself if:
| Situation | File ITR? |
| You have rental income from property | ✅ Yes |
| You have capital gains from shares, mutual funds, or property | ✅ Yes |
| Your FDs are in a different bank than your pension account | ✅ Yes |
| You earn dividend income | ✅ Yes |
| You have income from business or profession | ✅ Yes |
| You are an NRI | ✅ Yes |
| You want to claim a refund for excess TDS | ✅ Yes |
| You have agricultural income above ₹5,000 | ✅ Yes |
| Only pension + interest from the same bank | ❌ Bank files for you |
| Total income below ₹4 lakh (any age) | ❌ No filing needed |
Frequently Asked Questions (FAQs)
Is it true that senior citizens don’t need to file ITR in 2026?
Only partially true. Senior citizens aged 75 and above who earn only pension and interest income from the same bank are exempt from filing ITR. The bank files on their behalf after they submit a declaration form. All other senior citizens must file ITR normally.
What is the difference between Section 194P and Section 393?
Both sections serve the same purpose — exempting eligible senior citizens (75+) from filing ITR. Section 194P is from the old Income Tax Act, 1961 and applies to returns filed in 2026. Section 393 is from the new Income Tax Act, 2025 and applies to returns filed from 2027 onwards. The eligibility conditions remain identical.
What is Form 125 and when do I use it?
Form 125 is the new declaration form under the Income Tax Act 2025 that replaces the old Form 12BBA. Senior citizens aged 75+ submit this form to their bank so the bank can deduct tax and file ITR on their behalf. It will be used for returns filed from 2027 onwards (Tax Year 2026-27+).
My pension comes in SBI but my FD is in HDFC. Can I avoid filing ITR?
No. The exemption requires both pension and interest income to come from the same specified bank. Since your pension (SBI) and FD interest (HDFC) are in different banks, you must file ITR yourself.
What is the minimum income for ITR filing for senior citizens?
Under the new tax regime, the basic exemption limit is ₹4 lakh for all individuals. If your total income (pension + interest + all other sources) is ₹4 lakh or below, you are not required to file ITR regardless of your age.
I am 68 years old. Can I use the no-ITR benefit?
No. The ITR filing exemption under Section 194P/393 requires age of 75 years and above. At 68, you are classified as a Senior Citizen but must file your own ITR if your income exceeds ₹4 lakh.
Do NRI senior citizens aged 75+ get this benefit?
No. The exemption is available only to Resident Indians. NRI senior citizens must file ITR in India if they have taxable income in India, regardless of their age.
What is Form 121 and how is it different from Form 15H?
Form 121 is the new unified form under the Income Tax Act 2025 that replaces both Form 15G (for non-seniors) and Form 15H (for senior citizens). You submit it to your bank to declare that your income is below the taxable limit, so the bank does not deduct TDS on your interest income.
Can the bank file ITR under the old regime on my behalf?
Yes. When you fill Form 125 (or Form 12BBA), there is a specific question asking whether you want to opt out of the new tax regime. If you choose “Yes,” the bank will calculate your tax under the old regime, considering applicable deductions you declare.
What happens if I don’t submit Form 125 to the bank?
Nothing happens automatically. The bank will not file ITR on your behalf unless you submit the declaration form. You will then need to file ITR yourself through the income tax portal before the applicable deadline.
Quick Reference: Forms That Changed for Senior Citizens
| Purpose | Old Form | New Form | Old Section | New Section |
| Bank files ITR for you (75+) | Form 12BBA | Form 125 | Sec 194P | Sec 393 |
| No TDS declaration (senior) | Form 15H | Form 121 | Sec 197A | Updated |
| No TDS declaration (all) | Form 15G | Form 121 | Sec 197A | Updated |
| New regime opt-out reference | Sec 115BAC | Sec 202 | Old Act | New Act |
