• Jun
  • 23
  • 2011

Notification Exempting Individual having Income less then 5 lakh from furnishing Income Tax Return

Salaried individuals with taxable income of less than Rs 5 lakh will not have to file income-tax returns in the current assessment year.  The finance ministry notified the scheme on Thursday, spelling out the conditions for the exemption announced in the Budget for 2011-12. Individuals with total taxable salary income of less than Rs 5 lakh in FY 2010-11, after allowing all deductions, will be exempt from filing tax returns this year.

However, the entire income must accrue from a single employer. That is, if an individual has a taxable salary income of less than Rs 5 lakh but had switched jobs in the middle of 2010-11, then he would have to file tax returns, clubbing income from all the employers.  The exemption will also not be available to individuals who have interest income of more than 10,000 in their savings deposits. Those with interest income of less than 10,000 will need to declare such income to their employer and have tax deducted on it to avail of the exemption.

The employee will have to declare his permanent account number to his employer and obtain certificate of tax deduction in Form No 16.

Those individuals having income from sources other than salary or having refund claims will not be covered under the scheme.

In his budget speech for 2011-12, Finance Minister Pranab Mukherjee had proposed to exempt salaried employees from filing tax returns in order to reduce the compliance burden on small taxpayers.

The finance ministry also stated that the scheme shall also not be applicable in cases wherein notices are issued for filing the income-tax return under section 142(1) or section 148 or section 153A or section 153C of the Income Tax Act 1961.

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Exemption u/s 139(1) to Specified Person from the requirement of furnishing a return of income for Assessment year 2011-12

NOTIFICATION NO. 36/2011 [F. NO. 142/09/2011 (TPL)]

DATED 23-6-2011

In exercise of the powers conferred by sub-section (1C) of section 139 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby exempts the following class of persons, subject to the conditions specified hereinafter, from the requirement of furnishing a return of income under sub-section (1) of section 139 for the assessment year 2011-12, namely :—

Class of Persons

1. An Individual whose total income for the relevant assessment year does not exceed five lakh rupees and consists of only income chargeable to income-tax under the following head,—

(A)  “Salaries”;

(B)  “Income from other sources”, by way of interest from a savings account in a bank, not exceeding ten thousand rupees.

Conditions

2. The individual referred to in para 1,—

(i)  has reported to his employer his Permanent Account Number (PAN);

(ii)  has reported to his employer, the incomes mentioned in sub-para (B) of para 1 and the employer has deducted the tax thereon;

(iii)  has received a certificate of tax deduction in Form 16 from his employer which mentions the PAN, details of income and the tax deducted at source and deposited to the credit of the Central Government;

(iv)  has discharged his total tax liability for the assessment year through tax deduction at source and its deposit by the employer to the Central Government;

(v)  has no claim of refund of taxes due to him for the income of the assessment year; and

(vi)  has received salary from only one employer for the assessment year.

3. The exemption from the requirement of furnishing a return of income-tax shall not be available where a notice under section 142(1) or section 148 or section 153A or section 153C of the Income-tax Act has been issued for filing a return of income for the relevant assessment year.

4. This notification shall come into force from the date of its publication in the Official Gazette.

Sandeep Kanoi

16 Responses to “Notification Exempting Individual having Income less then 5 lakh from furnishing Income Tax Return”

  1. Visweswaran says:

    The lots of conditions attached to this notification makes it difficult to understand by aam aadmi.Besides only least percentage of people will really follow this.

  2. deepak says:

    As per govt’s new notification dated 23.06.2011, there is no need to file income tax return if Gross taxable income is less than 5 lacs OR Net taxable income less than 5 lacs after deduction of Rs. 1.2 lacs (LIC, PPF, Infrastructure bonds etc.)

  3. S. Ramachandran says:

    Very much, as this is the only proof of having paid the requisite tax (if any)

  4. CA.PUNIT KR VARSHNEY says:

    whether in such case form 16 shall be treated as return for the purpose of loan?

  5. ALOK RAMAN says:

    THIS NOTIFICATION WITH THE HELP OF CONDITIONS BRINGS RIGITIDITY IN THE NAME OF SIMPLICITY AND PUSHES ASSESSEE TO LEGAL PROBLEMS

  6. mvrao says:

    Meaningless.
    90 % of salaried personnel are forced to opt for additional savings means –” IFOS” to sustain their families while the Govt keeps crushing them with higher and higher prices. Where is the question of benefitting from such a silly option ??

  7. Neerav Bhomaj says:

    In rarest of the rare cases, employees would have NIL refund.

  8. prakash says:

    Apparently scheme is very good. salaried persons in general are not showing income from income from FD’s and saving bank or income u/s. 64 may be not intending to pay tax personally in cash or for lack of knowledge.

  9. Deep Chand Verma says:

    By these cosmetic changes government is not going to help aam admi.Instead of this the government should have raised the exemption limit to 3 lac rupees. Once a person has paid the tax , he has no problem in filing the return . By this notification the govt. has reduced its burdon of work thats all nothing else

  10. sree says:

    can u pl tell me from whom we have to deduct tds and while paying/receiving donations is it require to do tds

  11. CA. Ashok Aggarwal says:

    aam aadmi who receives salary income plus interest needs to read this circular carefully to avoid any legal problem for non filing of IT return. briefly an employee who has disclosed his/her other income to employer and employer deducted tax from salary and issued form 16 dischages employee from filing tax return.

  12. PRAMOD MITTAL TAX ADVISOR 9460166775 says:

    this is very good idea

  13. PRAMOD MITTAL TAX ADVISOR 9460166775 says:

    GOOD THINK OF INDIA ABOUT LOWER CLASS PERSON

  14. Jasmeet says:

    Please help in understanding if this covers retired govt. employees where pension is only source of income however form-16 would not be applicable. Thanks.

  15. Rugram says:

    This provision would benefit a very small no. of assessees, as people who have salary income are more likely to have fixed deposit or other bank investments besides savings bank accounts. Those who earn even a small amount of interest from bank deposits other than savings bank accounts, have to file their tax returns. There were earlier news reports that this provision would eliminate some 85 lacs assessees from filing returns, and this estimate now seems to be unrealistic.

  16. A.Wilson says:

    For those wish for 100% compliance:

    99% of the employees will not declare their Interest from Savings Bank for the purpose of tax deduction, then ulitimately they have to pay their tax on interest of SB Account by way self assessment tax and need to file their return of income

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