FAQs: Form 125 — Declaration by Specified Senior Citizen
Q1. What is Form 125?
Form 125 is the new form under the Draft Income Tax Rules 2026 (Rule 208) that must be submitted by specified senior citizens for furnishing a declaration and evidence of claims under Section 393(1) of the Income Tax Act, 2025. It has replaced the earlier Form 12BBA under the Income Tax Act, 1961, just as Section 393 has replaced Section 194P.
Q2. What was Form 12BBA, and why has it been replaced?
Form 12BBA was used by pensioners to declare their income and submit evidence of claims under Section 194P of the Income Tax Act, 1961. Under the new Income Tax Act, 2025, Form 12BBA has been replaced by Form 125, and Section 194P has been replaced by Section 393(8)(iii).
Q3. Who is a “Specified Senior Citizen” eligible to file Form 125?
A “specified senior citizen” is an individual who satisfies all of the following conditions:
- He/she is 75 years or more at any time during the previous financial year.
- He/she has income from pension credited in his/her pension account with a “specified bank.”
- He/she has no other income except interest received/receivable from any account maintained in the same specified bank where pension is credited.
Q4. What is a “Specified Bank”?
A “specified bank” means a banking company which is a scheduled bank and has been appointed as an agent of the Reserve Bank of India under Section 45 of the Reserve Bank of India Act, 1934.
Q5. What is the purpose of submitting Form 125?
By filing Form 125 (earlier Form 12BBA) with the bank, the senior citizen avails the benefit of having the bank compute their total income (pension + interest), apply eligible deductions and rebates, and deduct TDS accordingly — thereby exempting them from filing an Income Tax Return (ITR) under Section 139.
Q6. What details are required in Form 125?
Form 125 requires the senior citizen to provide:
- Name, address, PAN or Aadhaar
- Previous year and date of birth
- Specified bank name
- Name of employer from which pension is drawn
- Pension Payment Order (PPO) number
Additionally, they must furnish total income details, sections under which deductions are claimed (e.g., 80C to 80U), information on rebate under Section 87A, and a confirmation that their income is restricted to pension and interest only.
Q7. What does the bank do after receiving Form 125?
Once the senior citizen submits the declaration, the specified bank:
- Calculates the gross total income (pension + interest income).
- Considers eligible deductions under Chapter VI-A and the rebate under Section 87A.
- Determines the net taxable income.
- Deducts the applicable TDS based on this net taxable income.
Q8. Is it mandatory to choose a tax regime while filing Form 125?
Senior citizens can opt for either the old or new income tax regime. If the old regime is chosen, the bank will request proof of deductions and exemptions. If the new tax regime is chosen, no investment proof is required.
If the senior citizen does not declare their preferred regime, the bank will deduct TDS as per the default New Tax Regime.
Q9. Does submitting Form 125 mean the senior citizen need not file an ITR at all?
Yes. After TDS is deducted under this provision, the specified senior citizen is not required to file an ITR under Section 139. This is the primary relief the provision is designed to offer.
Q10. Can a senior citizen with rental income or capital gains avail this benefit?
No. If a senior citizen has any other income (e.g., rental income, capital gains, dividends) beyond pension and bank interest, they will not be eligible for this exemption and will need to file their income tax return in the usual manner.
Q11. Can a senior citizen choose NOT to use this provision and file an ITR instead?
Yes, availing this exemption is not mandatory. If a senior citizen prefers to file their ITR instead, they can do so.
Q12. What certificate does the bank issue to the senior citizen after deducting TDS?
The specified bank issues a Form 16 (TDS certificate) to the senior citizen in respect of tax deducted on pension and interest income under this provision. Part B (Annexure-II) of Form 16 has been specifically amended to incorporate the details relevant to senior citizens.
Q13. In what format is Form 125 submitted — online or physical?
As per the rules, the declaration is to be furnished in paper form to the specified bank.
Q14. What if the bank fails to comply with the TDS deduction obligations?
If banks do not fulfill their duties under this provision, they are subject to penalties under the Income Tax Act. These provisions ensure the process remains smooth and transparent for the senior citizens.
Q15. What is the significance of Sl. No. 8(iii) in Table — Section 393(1)?
Under the new Income Tax Act, 2025, Rule 208 of Draft Income Tax Rules 2026 describes that Form 125 must be submitted by specified senior citizens for furnishing a declaration and evidence of claims under Section 393(1). Sl. No. 8(iii) in the Table refers to the specific sub-clause under which the “specified senior citizen” is defined — corresponding to the individual having income only from pension and interest from the same specified bank.
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