Shankar MS, 67 (name changed), a retired public sector undertaking official and regular tax-payer, received a scrutiny notice from the Income Tax department on his income tax returns (ITR).
"Close to my retirement, I had invested money in mutual funds and the I-T department wanted to know about my post-retirement income sources," Shankar said.
The notice was a routine procedure for scrutiny of ITRs. But its effect was prolonged harrassment for the senior citizen.
People like Shankar would be able to heave a sigh of relief now, with the Central Board of Direct Taxes (CBDT) directing on March 14 that cases of senior citizens and small taxpayers filing IT returns in ITR-1 & ITR-2 forms during fiscal 2011-12 would be exempted from scrutiny.
The CBDT order was in response to concerns raised by taxpayers over the random scrutiny procedure."To redress the grievance, it has been decided that during the financial year 2011-12, cases of senior citizens and small taxpayers, filing income-tax returns in ITR-1 and ITR-2 will be subjected to scrutiny, only where the I-T department is in possession of credible information," a CBDT official said.
While, the senior citizens should be individual taxpayers of 60 years or above, small taxpayers would be individuals and Hindu Undivided Families whose gross total income before availing deductions does not exceed Rs10 lakh.
{{/usCountry}}While, the senior citizens should be individual taxpayers of 60 years or above, small taxpayers would be individuals and Hindu Undivided Families whose gross total income before availing deductions does not exceed Rs10 lakh.
{{/usCountry}}"It is a welcome decision," said chartered accountant Kuldip Rai Aggarwal. "A senior citizen having income from mutual fund or bonds now won’t be subjected to scrutiny unnecessarily."
However, the measure is valid only for the current fiscal, as of now.