No filing of tax return for salary and interest income up to Rs 5 lakh

As many as 85 lakh salaried tax payers whose taxable income, including salary and interest income, is up to Rs 5 lakh, are not required to file income-tax return from now onwards.

“No income-tax returns is required for salaried persons whose annual annual taxable income including salary and interest is up to Rs 5 lakh. We would shortly notify this,” a Central Board of Direct Taxes official said.

However, he said this would not cover income from other sources like house property, capital gains and gains from profession and business.

The scheme would be applicable from assessment year 2011-12 onwards. This means that the salaried persons eligible under the scheme would not have to file returns for the financial year 2010-11 in 2011-12 (assessment year).

Under the scheme, those salaried persons who want to claim tax refund, would have to income tax file return.

As per the Memorandum to the Finance Bill 2011, the government will be issuing a notification exempting ‘classes of persons’ from the requirement of furnishing income tax returns.

Under the scheme, the salaried person wants exemption from filing IT return, has to disclose about the incomes like dividend and interest to his employer for tax deduction.

In the scenario, the Form 16 issued to salaried employees will be treated as Income Tax Return. At present, it is obligatory for all salaried persons to file income tax return under the Income Tax Act, 1961.

The idea behind the move is that in cases where there are no other sources of income, filing of a return is a duplication of existing information.

Income Tax Benefits

 

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