Under the Income Tax Act in India, specific groups residing in certain regions of select states are eligible for exemptions from income tax payment.
ITR filing: As the income tax return filing deadline approaches, many taxpayers, especially senior citizens and individuals belonging to the Scheduled Tribes, wonder if they need to file their returns. It is to be noted that every individual in the country need to file their income tax returns even if their income is not taxable or whether they are not paying any income tax. One should file their ITR by July 31 of a financial year to avoid penalties.
Under the Income Tax Act in India, specific groups residing in certain regions of select states are eligible for exemptions from income tax payment. These exemptions are provided according to predefined criteria, including income thresholds, socio-economic standing, and the occupations of individuals within these communities. Such targeted tax relief measures aim to alleviate the financial obligations of marginalized populations in these areas, thereby promoting equitable opportunities for all.
Exemptions for residents of northeastern states and UTs
Under Section 10(26) of the income tax laws, certain individuals are granted exemption from income tax payment. Specifically, members of scheduled tribes residing in states such as Tripura, Mizoram, Manipur, Nagaland, Assam, and Arunachal Pradesh are entitled to this exemption. Additionally, tribal communities residing in the Ladakh region of the Union Territory of Jammu and Kashmir are also eligible for tax exemption under this provision.
Exemptions for individuals in certain areas
As outlined in Section 10(26) of the Income Tax Act, a specific category of income is exempted from income tax obligations. This exemption pertains to income generated within specified areas or states, in the form of dividends or interest on securities. More specifically, this exemption applies to members of a Scheduled Tribe who reside in regions designated within the Constitution.
These are: the North Cachar Hills District, Karbi Anglong District, Bodoland Territorial Areas District, Khasi Hills District (Meghalaya), Jaintia Hills District (Meghalaya), and Garo Hills District (Meghalaya).
Additionally, the states of Manipur, Tripura, Arunachal Pradesh, Mizoram, Nagaland, and the Ladakh region are also covered under this exemption.
Exceptions under Section 10(26)
Certain incomes are ineligible for exemption under Section 10(26). Income from renting property outside specified regions and from conducting business outside those areas do not qualify for tax exemption.
Section 10(26) of Income Tax Act
Section 10(26) of the Income Tax Act, 1961 provides for tax exemption to members of Scheduled Tribes individuals living in the Tripura, Mizoram, Manipur, Nagaland, Assam, Arunachal Pradesh, and Ladakh region of the State of Jammu and Kashmir.
A member of any of scheduled tribes living in any of these regions when generates income while living there is tax exempted.
Claiming tax exemption
One can claim tax exemption under Section 10(26) by filing an income tax return (ITR). Since their incomes qualify for tax exemptions based on the nature of that income, these individuals need to disclose the income generated and the exemption.
The individuals belonging to the Scheduled Tribes residing in several northeastern states and the Ladakh region of the Union Territory of Jammu and Kashmir are required to submit Income Tax Returns (ITRs) if their earnings exceed the limit set by the Income Tax Department. It is essential for them to declare their total income and avail the exemptions provided under sections 10(26) and 10(26AAA) of the Income Tax Act.
ITR exemption for certain senior citizens
An individual resident aged 60-79 is a Senior Citizen for Income Tax purposes. A Super Senior Citizen is 80 years or older. These classifications impact tax benefits and exemptions. Compliance with regulations for each category is crucial for accurate tax filing and financial planning.
Under Section 194P of the Income Tax Act, individuals who are 75 years old or above and receive pension income along with interest income from a specified bank account are eligible to opt out of filing their Income Tax Return (ITR). To proceed with this option, qualifying seniors need to complete a declaration in Form 12BBA. The form must be submitted to the designated bank where the pension and interest income is received. Subsequently, the bank will assess and deduct the applicable income tax based on the information provided in the form.
Source: https://www.businesstoday.in/personal-finance/tax/story/itr-filing-2024-these-individuals-dont-have-to-pay-income-tax-should-they-file-their-returns-435803-2024-07-04
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