QUESTION: I am attaching a copy of the Press Note from the Central Board of Direct Taxes regarding scrutiny of returns of senior citizens. If my interpretation is correct, returns of senior citizens will not fall for scrutiny irrespective of the income shown, as long as the return is filed in ITR 1 or ITR 2. The income limit of Rs.10 lakh to fall outside the purview of scrutiny would apply only to “small” assessees, other than senior citizens. You may like to clarify the same.
ANSWER: The above letter from George Cheriyan, Senior Vice-President of Income-tax Appellate Tribunal, understands the Press Release on the issue discussed in The Hindu dated April 24, 2011, to mean that the returns of senior citizens filed in ITR 1 and 2 will avoid scrutiny, except where there is credible information against acceptance of such return. Limit of Rs.10 lakh will apply only to taxpayers characterised as “small taxpayers” other than senior citizens so that all returns of senior citizens irrespective of the income limit will be spared scrutiny. Such an interpretation is quite plausible.
The reader has also drawn attention to the proposal to simplify the return with the name “Sahaj” for salaried employees with income up to Rs.5 lakh, while “small” businessmen and professionals can file simplified “Sugam” return. As long as law is not simplified, the simplified return may throw a greater responsibility on the taxpayers to disclose correct income without steps leading to correct computation available in the larger returns.
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