Monday, June 6, 2011

Notification for exemption from filing Income Tax Return soon

As many as 85 lakh salaried tax payers with an annual income of up to Rs 5 lakh will not have to file income-tax return from now onwards, a finance ministry official said.
"No income-tax returns would be required for salaried persons earning up to Rs 5 lakh per annum. We would notify this in first week of June," outgoing Chairman of Central Board of Direct Taxes Sudhir Chandra told reporters recently.
The Union Finance Minister Mr.Pranab Mukhejee also said on 24th May, 2011 that the salaried tax payers with an income less than Rs. 5 Lakh should not file Income Tax Return from the Assessment Year 2011-12 ( ie from the Financial year 2010-11). This was according to his budget proposal on the end of February, 2011.
But, earlier it was not clear that the implementation of this proposal will be come in to effect from this year or only from the financial year 2011-12. Now it is clear that the effect of not filing income tax return for the income less than Rs. 5 lakh is from the financial year 2010-11 onwards.
When addressing the 27th annual conference of the Chief Commissioners and the Directors-General of Income Tax the Finance Minister reported this matter.
However, such tax payers would have to file return if they want to claim refunds, Mr. Chandra said.
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.
In case such a salary earner has income from other sources like dividend, interest etc and does not want to file returns, he would have to disclose such income to his employer for tax deduction.
In the scenario, the Form 16 issued to salaried employees will be treated as Income Tax Return.
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.
Source: PTI

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