News

15th June, 2006

Senior citizens and tax

Under the Senior Citizens Savings Scheme (SCSS) 2004, the Finance Minister had announced that no tax would be deducted at source on interest paid.

In Budget 2005, the taxable income threshold for senior citizens was raised to Rs 185,000, thus benefiting a large majority of seniors in that they did not have to file tax returns if their income fell below the limit.

It is now understood from the banks that the Government has `clarified' that the TDS regime will be applicable to SCSS 2004 with effect from the FY 2006-07.

While this may be acceptable, what is harsh on seniors is the botheration of filing declaration in Form 15H with the tax deducting bank or the Post Office, failing which they will have to file return for claiming refund from the tax authority not a very pleasant experience.

In all likelihood many may fail to do so as the revised instructions on TDS have not been made public yet.

The Government will end up retaining large sums of unjustified collections remaining unclaimed.

Citizens, including seniors, have already been burdened with the ever-expanding net of service tax on every conceivable payment mode.

The imposition of TDS for seniors is a cruel joke.

G. K. Udeshi
Mumbai