Budget 2011- Exemption to a class or classes of persons from furnishing a return of income

Under the existing provisions contained in section 139(1) of the Income-tax Act, every person, if his total income during the previous year exceeds the maximum amount which is not chargeable to income-tax, is required to furnish a return of his income. 

In the case of salaried tax payer, entire tax liability is discharged by the employer through deduction of tax at source. Complete details of such tax payers are also reported by the employer through Tax Deduction at Source (TDS) statements. Therefore, in cases where there is no other source of income, filing of a return is a duplication of existing information.

In order to reduce the compliance burden on small tax payer, it is proposed to insert sub-section (1C) in section 139. This provision empowers the Central Government to exempt, by notification in the Official Gazette, any class or classes of persons from the requirement of furnishing a return of income, having regard to such conditions as may be specified in that notification.

Consequential amendments are also proposed to be made to the provisions of section 296 to provide that any notification issued under section 139(1C) shall be laid before Parliament.

These amendments will take effect from 1st June, 2011.

Related posts:

1. Amendment in Electronic Furnishing of Return of Income Scheme, 2007
2. Budget 2011-12 – Exemption of specified income of notified body or authority or trust or board or commission
3. New Income Tax Exemption Limit for Individuals and Senior Citizens – Budget 2011-12
4. False claim in return of Income would be treated as case of concealment of Income or of furnishing inaccurate particulars of Income
5. Validity of levy of penalty for not furnishing the return of income within the prescribed time