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