Exemption for Filing of Income Tax Return

Friends 
             No doubt that Income Tax Department had issued a notification regarding exemption for filing of Income Tax Return. But there are many questions such as who are exempted or who are not exempted for filing of Income Tax Return.  To resolve public queries, some common question answers (FAQs) are given below to clarify the issue :-




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

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 upto 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. 

2.  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  

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

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


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.  

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

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

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

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” u/s  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.   

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

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

7.  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? 

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).  

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

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 .
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Mandatory e-filing of Income Tax Return (Cilck Here)

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