No tax returns on pay up to Rs 5 lakh

Salaried individuals with a total taxable income of up to Rs 5 lakh do not have to file income tax returns this year. However, in case tax payers in this bracket want to seek an income tax refund , they will have to file their returns.

The Central Board of Direct Taxes (CBDT) on Thursday notified the scheme exempting salaried taxpayers with total income up to Rs 5 lakh from filing income tax returns for assessment year 2011-12, which will be due on July 31, 2011.

Read: Govt notifies simpler I-T return forms

According to the notification, individuals having total income up to Rs 5 lakh for financial year 2010-11, after allowable deductions, consisting of salary from a single employer and interest income from deposits in a saving bank account of up to Rs 10,000 are not required to file their income tax return. Such individuals must report their Permanent Account Number (PAN) and the entire income from bank interest to their employer, pay the entire tax by way of deduction of tax at source, and obtain a certificate of tax deduction in Form No. 16.

Read: Ways to prune your tax burden

However, persons receiving salary from more than one employer, having income from sources other than salary and interest income from a savings bank account, or having refund claims shall not be covered under the scheme.

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

The CBDT chairman had indicated in the post-budget press conference this year that the move was on the cards as part of the government's policy to switch to a more taxpayer- friendly tax administration.

The finance ministry has also introduced simpler income tax return forms 'Sahaj' and 'Sugam' aimed at reducing the compliance burden on salaried persons and small businessmen.

The new return forms are in line with the government's effort to make filing of returns simpler and user- friendly.

Efforts are also on to facilitate electronic filing through Sahaj and Sugam I-T return forms. While Sahaj is for salaried people, Sugam is for small businessmen and professionals covered under presumptive taxation.

Under India's presumptive taxation regime, a person carrying on business will not be required to get his accounts audited if the annual total sales, turnover or gross receipts is less than Rs 60 lakh.

The limit was increased by finance minister Pranab Mukherjee in 2010- 11 budget from Rs 40 lakh.

Courtesy: Mail Today