24 June 2011

No tax returns on salaries up to Rs. 5 Lakh

Employees who earn up to Rs.5 lakh need not file income tax returns from assessment year 2011-12, an official statement said Thursday.

The Central Board of Direct Taxes (CBDT) has notified the scheme. Returns for assessment year 2011-12 are due July 31.

Individuals having total income up to Rs.5 lakh for fiscal 2010-11, after allowable deductions, consisting of salary from a single employer and interest income from deposits in a savings bank account up to 10,000, are not required to file their income tax returns.

"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," the statement said.

People 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.

Finance Minister Pranab Mukherjee had in his budget proposed to exempt salaried employees from filing tax returns.

The reason behind the move is that if a person has no other source of income, filing tax return is just a duplication of existing information.

The move would give relief to millions of salaried employees working in both the government and private sectors.