My mother is a Sr. citizen and receives family pension from the central govt after my father’s death. There is a small business in her name and the profits are in the range of 1-2 lakhs per annum. She has income from bank interest and does not have any salaried income. Is she eligible for standard deduction of 50K or is she only eligible for deduction of 15K (due to family pension) while filing her ITR? Also due to the small business which she is showing, which ITR form does she have to file (last year she filed ITR4).

Ans: Amount transferred to mother is a gift which is not considered as income. Income received by your mother on senior citizen FD will be taxable in her hand and she can take deduction of Rs.50000 u/s 80TTB

Ans: Person giving teaching service is considered as professional and taxable under the head Income from Business and Profession. For Income from Business and Profession, 2 ITRs forms available. ITR 3 and ITR 4 (for presumptive scheme). As income is below exemption limit, it is advisable to file ITR 3.

Ans: NO

Ans: There are a few possible reasons why TDS (Tax Deducted at Source) is being deducted from your mother's investments, despite submitting Form 15H and filing ITR.

1. Incorrect or Late Submission of Form 15H
Form 15H must be submitted at the start of the financial year to all institutions where she has investments.
If submitted after TDS is deducted, it won’t apply retrospectively to recover the deducted tax.
Ensure the form is submitted separately to each bank, post office, or financial institution.
2. Exceeding the Basic Exemption Limit
For senior citizens (60+ years), income up to Rs. 3 lakhs is tax-free.
If her total taxable income (pension + interest from investments) exceeds Rs. 3 lakhs, TDS will still apply.
Even if TDS is deducted, she can claim a refund while filing her ITR if her total tax liability is zero.
3. Form 15H Validity Rules
Form 15H is only valid if total taxable income is below the exemption limit.
If her total income is more than Rs. 3 lakhs, banks and post offices will ignore Form 15H and deduct TDS.
4. Different TDS Thresholds for Investments
Banks deduct TDS on FD interest if it exceeds Rs. 50,000 per year for senior citizens.
Post Office schemes (like SCSS) deduct TDS if interest crosses Rs. 50,000 per year.
Government securities may also have TDS rules based on the issuing authority.
5. PAN Not Updated with the Bank/Post Office
If PAN is not linked to the investment accounts, higher TDS at 20% is deducted.
Ensure all investments have PAN updated to avoid excess TDS.
6. Errors in Tax Deduction System
Sometimes, banks deduct TDS even if Form 15H is submitted correctly.
In such cases, she can file an ITR and claim a refund from the Income Tax Department.
What to Do Now?
Check total taxable income to confirm if she qualifies for Form 15H.
Verify all Form 15H submissions with banks and post offices.
Ensure PAN is updated in all financial institutions.
If TDS is wrongly deducted, file an ITR and claim a refund.
Would you like help with checking if she is eligible for a refund?

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in

https://www.youtube.com/@HolisticInvestment