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Income-tax (26th Amendment) Rules, 2021

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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:

notification_99_2021-2

Form No. 16

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

notification_99_2021-2

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:

notification_99_2021-10-24

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