Good News for Grandparents! Here's How to Get Tax Relief Without Filing an ITR

Form 125: Senior citizens aged over 75 years are now exempt from filing an Income Tax Return (ITR). Learn what the new Form 125 is and who stands to benefit fully from this new income tax rule.

Form 125: As one ages, navigating the complexities of paperwork and tax filing can become an incredibly exhausting task. If you—or an elderly member of your household—rely solely on a pension and bank interest income, the government has provided you with significant relief. The season for filing Income Tax Returns (ITR) for Assessment Year (AY) 2026-27 has officially begun. In this context, senior citizens aged 75 years or older are no longer required to file an ITR. By simply filling out a straightforward form, they can completely free themselves from this hassle. Let’s explore who can avail of this rule's benefits and how.

What Are This New Rule and Form 125?

Under Section 194P of the Income Tax Act, senior citizens aged 75 years and above have been granted an exemption from filing an ITR. To avail of this, they are required to submit Form Number 125 (formerly known as Form 12BBA) to their bank. This serves as a formal declaration. Upon submission, the bank itself calculates your total income. It deducts your investments and eligible tax exemptions (such as those under Sections 80C, 80D, or 80TTB); if any tax liability remains, the bank deducts it in the form of TDS (Tax Deducted at Source). Consequently, these senior citizens are not required to file a separate income tax return thereafter.

Who Can Avail of This Exemption?

To benefit from this government relief, certain essential conditions must be met:

• You must be aged 75 years or older.
• You must be a resident of India.
• Your sole sources of income must be your pension and the interest earned from that specific bank. Your pension and interest income must be credited to a single ‘specified’ bank account.

Who is still required to file an ITR?

If you fall under any of the categories listed below, you cannot submit Form 125 and must file your ITR in the standard manner:

• Individuals under the age of 75.
• Non-Resident Indian (NRI) senior citizens.
• Those who have sources of income other than pension and interest—such as rental income from property, profits from shares or mutual funds (Capital Gains), business income, or agricultural income exceeding the prescribed limit.
• Those who hold bank accounts in more than one bank, or who utilize the services of a non-specified bank.

How and where to submit this form?

The process is extremely simple. You are required to submit this form to your bank once a year:

• Download the Form: Download Form 125 from the Income Tax Department's website or from your bank's portal.
• Fill in the Details: Accurately enter all necessary details, such as your name, PAN, date of birth, employer's name, and Pension Payment Order (PPO) number.
• Attach Investment Proofs: If you are opting for the Old Tax Regime, attach the relevant documents regarding your investments to claim tax exemptions.
• Submit to the Bank: Submit this form—either online via Net Banking or by visiting in person—to the specific bank branch where your pension is credited. Upon submission, the bank will issue you a TDS certificate.