Income-tax (26th Amendment) Rules, 2021

The Central Board of Direct Taxes (CBDT) notified the Income-tax (26th Amendment) Rules, 2021 vide a Notification dated 2nd September 2021. With this amendment, CBDT notified the provision regarding the furnishing of declaration and evidence of claims by senior citizens for Exemption from Income Tax Return Filing under section 194P of the Income Tax Act. The CBDT also notifies the new Rule 26D.

Synopsis of Income-tax (26th Amendment) Rules, 2021

CBDT notifies new Rule 26D - Furnishing of declaration and evidence of claims by a specified senior citizen under section 194P
CBDT also introduced the Amended Rule 31 & 31A, Amended Form no. 12BBA, FORM NO. 16, FORM NO. 24Q, Form No.26QB, FORM NO. 26QC and Form No.26QD.

New Rule 26D - Furnishing of declaration and evidence of claims by a specified senior citizen under section 194P

The declaration is required to be furnished by the specified senior citizen to the specified bank in Form No. 12BBA.
On furnishing of the declaration in Form No. 12BBA, the specified bank shall, after giving effect to the deduction allowable under Chapter VI-A and rebate allowable under section 87A, compute the total income of such specified senior citizen for the relevant assessment year and deduct income-tax on such total income based on the rates in force.

Note: The effect to the deduction allowable under Chapter VI-A shall be given based on the evidence furnished by the specified senior citizen during the previous year The declaration referred to in sub-rule (1) and evidence for claiming deduction under Chapter VI-A referred to in sub-rule (3) shall be properly maintained by the Specified Bank and shall be made available to the Principal Chief Commissioner of Income-tax or Chief Commissioner of Income-tax, as and when required. The Principal Director General of Income-tax (Systems) or the Director-General of Income-tax (Systems), as the case may be, shall specify the procedure for furnishing of particulars of Form No. 12BBA referred to in sub-rule (1) and evidence referred to in sub-rule (3) by the specified banks to the Principal Chief Commissioner of Income-tax or Chief Commissioner of Income-tax, as and when required

Amendments in Rule 31 of Income Tax Rules

According to Rule 31 of Income Tax Rules, Certificate of tax deducted at source to be furnished under section 203 The certificate of deduction of tax at source by any person following Chapter XVII-B or the certificate of payment of tax by the employer on behalf of the employee under sub-section (1A) of section 192 shall be in following

Form No. 16, if the deduction or payment of tax is under section 192; and section 194P
Form No. 16A if the deduction is under any other provision of Chapter XVII-B.

Note: Section 194P has been inserted via Income-tax (26th Amendment) Rules, 2021

Amendments in Rule 31A of Income Tax Rules

Rule – 31A, Statement of deduction of tax under sub-section (3) of section 200 Every person responsible for deduction of tax under Chapter XVII-B, shall, in accordance with the provisions of sub-section (3) of section 200, deliver, the following quarterly statements to the Director-General of Income-tax (Systems) or the person authorized by the Director-General of Income-tax (Systems: Statement of deduction of tax under section 192 AND and section 194P in Form No. 24Q; Statement of deduction of tax under sections 193 to 196D (other than section 194P)” in—

Form No. 27Q in respect of the deductee who is a non-resident not being a company or a foreign company or resident but not ordinarily resident; and
Form No. 26Q in respect of all other deductees

Note: The words "section 194P and other than section 194P" has been inserted via Income-tax (26th Amendment) Rules

New sub-rule (3B) of Rule 31A

New sub-rule (3B) of Rule 31A has been inserted via Income-tax (26th Amendment) Rules, 2021. New sub-rule (3B) of Rule 31A states that;

Specified bank responsible for deduction of tax under section 194P shall furnish evidence produced by the specified senior citizen for claiming deduction under chapter VI-A to the Principal Director General of Income-tax (Systems) or Director General of Income-tax (Systems) or to any other person authorized by the Principal Director General of Income-tax (Systems) or Director General of Income-tax (Systems), as and when required

New Form no. 12BBA

In the Income-tax Rules, 1962, in Appendix II, after Form No.12BB, the following New Form no. 12BBA shall be inserted via Income-tax (26th Amendment) Rules. The new form is used by Specified Senior Citizen to furnish declaration under sub-clause (iii) of clause (b) of Explanation to section 194P:

Open PDF in new tab

Form No. 16

CBDT also introduces Form No. 16 through this Income-tax (26th Amendment) Rules. The new form is reproduced below for reference:

Open PDF in new tab

FORM NO. 24Q, Form No.26QB, FORM NO. 26QC, and Form No.26QD were also notified with these amendments. The new forms are attached here for reference:

Open PDF in new tab

Back to Learn

Frequently Asked Questions

Common questions about Income Tax 26th Amendment Rules.

The Income-tax (26th Amendment) Rules, 2021 is a notification issued by the Central Board of Direct Taxes (CBDT) on 2nd September 2021. It introduces provisions regarding the furnishing of declaration and evidence of claims by senior citizens for exemption from income tax return filing under section 194P of the Income Tax Act.

The new Rule 26D prescribes the method for furnishing the declaration and evidence of claims by a specified senior citizen under section 194P. It requires the senior citizen to submit a declaration in Form No. 12BBA to the specified bank, which will then compute the total income and deduct tax accordingly.

As per Rule 26D, the specified bank will compute the total income of the specified senior citizen for the relevant assessment year after giving effect to the deductions allowed under Chapter VI-A and the rebate under section 87A of the Income Tax Act, based on the evidence furnished by the senior citizen.

The specified bank is required to properly maintain the declaration in Form No. 12BBA and the evidence for claiming deductions under Chapter VI-A, as furnished by the specified senior citizen. These documents must be made available to the Principal Chief Commissioner of Income-tax or Chief Commissioner of Income-tax, as and when required.

Rule 31 has been amended to include Form No. 16 for issuing certificates of tax deducted at source under section 194P. Rule 31A has been amended to require specified banks to furnish quarterly statements of tax deduction under section 194P in Form No. 24Q, and to provide evidence produced by senior citizens for claiming deductions under Chapter VI-A.

Form No. 12BBA is the declaration form that a specified senior citizen must furnish to the specified bank, as per the new Rule 26D, to claim exemption from income tax return filing under section 194P.

The new forms introduced by this amendment include Form No. 12BBA (declaration by senior citizen), Form No. 16 (certificate of tax deduction), Form No. 24Q (quarterly statement of tax deduction), Form No. 26QB, Form No. 26QC, and Form No. 26QD.

A 'specified senior citizen' is a term used in the context of section 194P of the Income Tax Act, which refers to an individual resident in India who is of the age of 60 years or more at any time during the relevant previous year and who does not have any income from business or profession.

The amendments to Rule 31A and the introduction of new forms like Form No. 24Q, Form No. 26QB, Form No. 26QC, and Form No. 26QD aim to streamline the process of furnishing quarterly statements of tax deduction by various persons responsible for deducting tax at source, including the specified banks under section 194P.

The Principal Director General of Income-tax (Systems) or the Director-General of Income-tax (Systems) will specify the procedure for furnishing the particulars of Form No. 12BBA and the evidence for claiming deductions under Chapter VI-A by the specified banks to the Principal Chief Commissioner of Income-tax or Chief Commissioner of Income-tax, as and when required.