More reports on: Government policies
Employees having income up to Rs5 lakh need not file tax returns news
21 February 2012

Salaried employees earning up to Rs5lakh a year would be exempted from filing income tax returns from this year, according to a finance ministry notification. The yearly income of some 8.5 million salaried persons in the country, including earnings from other sources like bank deposits, does not exceed Rs5 lakh.

However, the exemption from filing would be allowed only in case the person had been given a certificate of tax deduction in Form 16 from his or her employer.

''An individual whose total income for the relevant assessment year does not exceed Rs5 lakh and consists of only income chargeable to income-tax under… salaries… (and) income from other sources, by way of interest from a saving account in a bank, not exceeding Rs10,000? have been exempted from filing the returns from assessment year 2012-13?, the notification said.

To claim income tax refund, however, such persons would need to file returns. It was obligatory for all salaried persons to file income tax returns under the Income Tax Act, 1961, prior to the notification.

It is felt that in cases where there were no other sources of income, filing of a return amounted to only a duplication of existing information, sources said.

As of now, income of Rs1.80-5 lakh attracts 10 per cent tax; Rs5-8 lakh, 20 per cent; and above Rs8 lakh, 30 per cent. The Direct Taxes Code (DTC) Bill, currently under scrutiny by a parliamentary panel, proposes to raising of the tax exemption limit to Rs2 lakh from Rs1.80 lakh.





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Employees having income up to Rs5 lakh need not file tax returns