No ITR filing required? Check who qualifies for exemption under Section 194P, how Form 125 works, and which senior citizens are eligible.
What if you could legally skip filing your Income Tax Return (ITR) this year? If you are a senior citizen living mainly on a pension and bank interest income, the government has already provided a way out.
As the filing of ITR season for AY 2026-27 has started, for many senior citizens, filing an ITR can feel like an unnecessary compliance burden, especially when income comes only from a pension and bank interest.
Under Section 194P, certain senior citizens can avoid filing an ITR altogether by simply submitting Form 125 to their bank. However, the exemption comes with strict conditions, and missing even one rule could still make ITR filing mandatory.
Here is a detailed look at who can benefit, how Form 125 works, and the conditions taxpayers must satisfy to legally avoid filing an ITR.
Form 12BBA, which has been renamed as Form No. 125 under the new Income-tax Act 2025, is used by senior citizens (75 years and above) to declare their pension income and bank interest income to their bank. This declaration helps the bank to calculate the taxes and deduct TDS, thereby exempting them from filing an ITR. Hence, TDS is deducted by the designated bank. Such a declaration in Form No. 125 does not cover any other income, like rent, commission, capital gains, etc.
Form 125 is a declaration form submitted by eligible senior citizens to the specified bank where:
The form contains:
You can submit Form 125 to your specified bank if you are an eligible senior citizen. Then the bank itself will:
Taxpayers who satisfy the following conditions may qualify to file Form 125
Income consists mainly of:
Important conditions
Taxpayers should make sure that they have:
Form 125 has been properly submitted to the specified bank where the account in which pension and interest income is received or receivable is being maintained.
The following taxpayers are generally not eligible to submit Form 125 (now renamed as Form 125 under the Income Tax Act, 2025 framework) for exemption from ITR filing:
1. Senior citizens below 75 years of age
2. Non-resident senior citizens
3. Those having any income other than a pension and bank interest. You become ineligible if you earn:
4. Senior citizens earning interest from multiple banks or having multiple income sources.
5. Taxpayers using non-specified banks
6. Senior citizens claiming complicated tax adjustments
Maintaining documentation remains important in case of future scrutiny or verification. Even if exempt from filing returns, taxpayers should keep the following documents ready.
Once Form 125 is submitted, the bank computes the senior citizen’s gross total income. Eligible deductions and rebates are considered and final tax liability is calculated, after which TDS is deducted by the bank itself. After this, the eligible senior citizen may not need to file an Income Tax Return separately.
Example
Suppose:
In this case:
In complying with Section 263(8)(b) of the Income Tax Act, a specified senior citizen is required to submit Form No. 125 in order to request exemption from submitting an ITR. Form No. 125 can be e-filed via net banking utilizing the service offered by the specified bank, or it can be submitted offline. As per the Income Tax Department, the form must be submitted once a year for every tax year for which exemption from filing of ITR is claimed.
Get the form: Eligible senior citizens should first download Form 125 from the Income Tax India portal or their bank’s website.
Mention all the required details: Enter your PAN, date of birth, bank account details, Pension Payment Order (PPO) number, and your current tax regime.
Declare Deductions (if applicable): If you are opting for the old tax regime, provide details of deductions, e.g., Section 80Cand 80TTB, and attach the required investment proofs.
Submit the form: Now submit the duly filed form along with proofs directly to the specified bank branch where you receive your pension. Once you submit the declaration, your bank will calculate your total income by taking into consideration any tax deductions and exemptions, and deduct applicable TDS (Tax Deducted at Source) under Section 194P. Following the successful verification process, your designated bank will issue a TDS certificate, after which you will be exempt from filing an ITR.
Disclaimer: This article is for informational purposes only and does not constitute professional tax advice. Tax laws and regimes are subject to frequent changes by the government. Readers should verify details with official Income Tax Department notifications or consult a Chartered Accountant before making any financial decisions.
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