FAQ ON EXEMPTION FROM FILING OF INCOME-TAX RETURN (A.Y. 2012-13)

What is the purpose of this notification and who are proposed to be exempted from the requirement of filing of the return?

1. The primary objective of this notification is to exempt those salaried taxpayers from the requirement of filing income-tax returns, who have (i) total income not exceeding Rs. 5,00,000, and (ii) the total income consists only of income chargeable to income-tax under the head ‘Salaries’ and interest income from savings bank account if such interest income does not exceed Rs. 10,000.

Further, such salaried taxpayer would be eligible for exemption from filing a return of income only if tax liability has been discharged by the employer by way of Tax Deducted at Source (TDS) and the deposit of the same to the credit of the Central Government. For this purpose, taxpayer has to intimate his interest income to the employer during the course of the year.

For Example

  (i)  If an individual has salary income of Rs. 4,90,000 and interest income from savings bank account not exceeding Rs.10,000 (which has been reported to the employer and tax has been deducted thereon), then the taxpayer would be exempt from the requirement of filing income-tax returns since the total income from both the above sources does not exceed five lakh rupees.

 (ii)  A taxpayer having salary income of Rs. 4,98,000 and interest income from savings bank account of Rs. 2,000 (which has been reported to the employer and tax has been deducted thereon), would also be eligible under this Scheme.

(iii)  A taxpayer having salary income up to Rs. 5,00,000 and nil interest income would also be eligible under this Scheme.

(iv)  A taxpayer having salary income of Rs.5,50,000, interest income from savings bank account of Rs. 8,000(which has been reported to the employer and tax has been deducted thereon), and who has claimed deduction of Rs. 70,000 under section 80C (on account of certain payments/investments/savings) would also be eligible under the Scheme.

 (v)  A taxpayer having salary income of Rs. 6,10,000, interest income from savings bank account of Rs. 10,000 (which has been reported to the employer and tax has been deducted thereon), and who has claimed deduction of Rs. 1,00,000 under section 80C (on account of certain payments/investments/savings), a deduction of Rs. 20,000 under 80CCF (Infrastructure Bonds) and a further deduction of Rs. 15,000 under section 80D (Health Insurance Premium) would also be eligible under the Scheme.

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Whether a salaried taxpayer having total income of less than Rs. 5,00,000 and claiming a refund of Rs. 3,000 would be eligible under this Scheme

2. No. The taxpayer has to file a return of income for making a claim of refund.

Is having a valid PAN a precondition for being covered by the notification?

3. Yes. The notification clearly specifies that the individual has to report his PAN to the employer. Hence having a valid PAN is a precondition for falling within the ambit of the notification.

Can an individual who is getting income under the head “salaries” from more than one employer take benefit of the notification?

4. No. A salaried taxpayer who has earned income from more than one employer during the financial year is not covered under this Scheme.

Whether this notification would also cover taxpayers having ‘loss from house property’, which are often reported by the employees to the employer.

5. No. Under the existing procedure, DDO/employer can give credit to the employee for a claim for loss under the head “income from house property” under section 24 made by the employee. As a result, a salaried employee’s total income may reduce to less than Rs. 5,00,000 as loss from the head “income from house property” would have been set-off against salary income. Such a taxpayer is not exempted from filing his return of income as the notification exempts only cases where the total income is under the head “salary” and from savings bank account (income from other sources) not in excess of Rs. 10,000. If the taxpayer has any loss under the head “income from house property”, he will not be eligible for exemption from filing a return of income.

Does savings bank account include other banking accounts like fixed deposits or recurring deposits accounts?

6. No. The benefit of the notification is available to taxpayers whose interest income comprises of interest earned on savings bank account ONLY.

Circular No. 8/2010, dated 13-12-2010 which is applicable for Assessment Year 2011-12 stipulates that the Drawing and Disbursing Officer (DDO)/Employer while deducting TDS from salary of an employee cannot allow deduction u/s 80G except donations made to the Prime Minister’s Relief Fund, the Chief Minister’s Relief Fund or the Lt. Governor’s Relief Fund. Whether the notification would cover only these cases?

7. Yes. An individual cannot avail the exemption under this notification if the claim of deduction for donations under section 80G is for donations other than those mentioned in Circular No. 8/2010. A taxpayer has to file a return of income for making a claim in respect of claim of deduction under section 80G for such donations (not specified in Circular No. 8/2010).

Will a salaried individual having agricultural income, which is exempt from tax, be covered within the ambit of the notification?

8. A salaried individual with agricultural income exceeding five thousand rupees shall be out of the ambit of the notification. A return will have to be filed in such a case, even if other conditions of the notification are satisfied as the agricultural income (of more than Rs. 5,000) has to be included, for rate purposes, in the total income.

(Article Was First Published on 18.07.2011 and Republished on 26.06.2012)


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0 responses to “Exemption from filing of Income-tax Return for Salaried”

  1. adwaita maji says:

    if salary income is 5,8000.Then bank intrest together with fd intrest is less than 10,000 is it mandatory to add this on salary income for calculation of tax. pl reply calculation o

  2. subrata kumar dutta says:

    How do my gross income Rs. 358239 invest Rs.100000 U/S 80c including house building loan deducted principal Rs. 17172 yearly let me know whether the income tax file return will have to be submitted by me or not?

  3. subrata kumar dutta says:

    How do my gross income Rs. 358239 invest Rs.100000 U/S 80c including house building loan deducted principal Rs. 17172 let me know whether the income tax file return will have to be submitted by me or not?

  4. somnath bhattacharjee says:

    I am a salaried person having house building loan and the amount of income after deduction under section 80c to 80U is below Rs. 5,00,000.00 .Would I require to file income tax return for financial year 2011-12 and the emi of the house building loan are deducted from my salary account by my employer.

  5. tauseef says:

    hi,

    I have a salary of 2.5L p.a. For the year 2011-2012 Income tax deducted from my salary is 5,165 Rs. At the year end in March 2012 i declared HRA for Rs.40,000. So my IT deductions were reduced to 3000 Rs.
    Now since i fall below the 5Lacs notification and exempted from filing IT returns, How do i get back the extra money which my company deducted TDS and deposited to central govt?Will it be credited directly to my account?
    I must get some 1600 Rs from IT dept. 
    NOTE: Its clearly stated in my FORM 16 that the tax payable is 3000Rs, but my company has deducted 5,165 Rs.
    PLS guide me

  6. CA. Subhash Chandra Podder ,FCA. says:

    Most of the salaried persons are not disclosing their savings bank accounts details /Interest earned. They are provided all tax savings plans/ details to their respective Employer. More than 50% salaried employees are claiming house rent by producing fictitious rental agreements/ monthly rental bills in spite of their staying in parents house , and claiming house rent . These should be checked by the Employer / Income tax department. Majority of this classes are thinking we do not file Tax returns as their salary / taxable return are will the limit Rs 500000/- This site has correctly stated who are with in this purview.
    I whole heatedly appreciate the effort made Team TAX GURU.
    CA. Subhash Chandra Podder
    26/06/2012

  7. Balkrishna B Raje says:

    I was filing Returns regularly  when I was in job. Last year -in March  2011- I resigned my job(filed I T return for AY 2011-12 also ). This year I am not  doing any job & so income except some FDs, NSCs etc. Total interest income not exceeding 80,000/-.
    Am I supposed to file I T Return in this Ay year -2012-13?

  8. Jayesh Shah says:

    Whether any Interest received from FD. NSC (As Reported earlier year deduction ) is elegible under 50000.00 limit for salary Person

  9. rmgaikwad says:

    My total income during the year 2011-12 is Rs 576000/- and my total saving in the fund during the period. Whether i would be exempted from the requirement of filling the return ?  

  10. Pugazhenthi says:

    Hi,

    For the rule “Can an individual who is getting income under the head “salaries” from more than one employer take benefit of the notification?”
    Lets say if the employee worked for an employer1 for 10 months and he changed to another employer2 for 2 months in that FY 2010-2011. Will he covered under this scheme.?

  11. S.R.Ayyangar says:

    If my total income from Pension & interest comes to 400,000/- and additional income by way of house rent is say Rs.50,000/-Do I have to file the return for the year ending 31st March’11?

  12. A S KOhli says:

    This is a typical hair-brained bureaucratic decision which does not benefit any body because almost everyone & especially the Senior citizens / pensioner have some Fixed Deposit Interest Income and hence will not benefit from this meaningless notification.
    Must be amended immediately to include FD Intt too within overall ceiling of
    Rs 5,00,000/ –

  13. Sunil Gupta says:

    A Person having total income of Rs.4,90,000 and also he has taken house loan. Will he be required to file the tax return for ay 2011-12.

    • ROHIT BANSAL says:

      reply to mr. sunil guta’s query

      respected sir as per the notification salaried assessee having total income of less than rs.500000 + having interest income from savings bank account not in excess of rs.10000 are exempted to file the return for the A.Y. 2011-12.

      as per ur details assessees total income is rs.490000/-
      assuming that he has intimated details of his interest income to the employer and the employer has also deducted the tax on the same and has also deposited the same to the credit of the central govt

      further the employee has taken the housing loan
      there are 2 type of deductions available
      one is under the head income from house property of interest amount
      and another is under sec. 80-c from the principal amount

      now as per the notification assessee can claim the deduction of principal repayment amount under sec. 80-cas it is deductible from the gross total income

      but for claiming the deduction of interest repayment under the head house property assessee has to file the return bcoz such an loss is not covered by the exemption notification….

      so it’s better that the assessee should file the return and claim the set off of loss under the head house property if any from other sources of income…..

  14. CA Mukesh J Mandowara says:

    Yes, we have to spread out the FAQ to all those persons who earned average 500000/- PA and they understand that they need not file return, inspite of that they are having house loan interest, also they having FD interest.

    SPREAD ALL OVER THE COMMON PEOPLE BY MOUTH PUBLICITY.

  15. C.GURUVEL says:

    MOST OF THE TAXPAYERS ARE HAVING BLIND BELIEF THAT THEY WERE EXEMPTED FROM FILING INCOME TAX RETURN,IF THEIR NET TAXABLE INCOME IS LESS THAN Rs.500000. SO FAR THEY HAVE NOT MENTION BANK SB ACCOUNT INTEREST AS THEIR INCOME.
    TAX PAYERS TAKE NET SALARY ONLY AFTER DEDUCTING HOUSING LOAN INTEREST. THEY ARE ALSO NOT FILING IT RETURN. THE MESSAGE WAS NOT REACHED TO TAXPAYER THAT THEY HAVE TO FILE RETURN
    HENCE MASS ADVERTISEMENT IS NESSESSORY TO CONVEY THE MESSAGE

    C.GURUVEL
    9363141581

  16. mahadevan says:

    Hopefully,the examples would dispel the lurking doubts in the minds of even an average salaried taxpayer. A pat on the back of the I.T.Dept.!

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