Are You Earning Up to Rs 5 Lakh? Here's What You Need to Know About Income Tax Returns

Income Tax Return Exemption for Salaried Persons

People earning up to Rs 5 lakh are exempted from filing Income Tax Returns. No income-tax returns would be required for salaried persons earning up to Rs 5 lakh per annum. A notification will be issued in the first week of June 2011. The scheme will be applicable from the assessment year 2011-12 onwards. This means that salaried persons eligible under the scheme would not have to file returns for the financial year 2010-11 in 2011-12 (assessment year). However, such taxpayers would have to file a return if they want to claim refunds.

In case a salary earner has income from other sources such as dividends, interest, etc., and does not want to file returns, he would have to disclose such income to his employer for tax deduction. In this scenario, the Form 16 issued to salaried employees will be treated as the Income Tax Return. The idea behind the move is that in cases where there are no other sources of income, filing a return is a duplication of existing information.

Exemption for Salaried Class

This exemption is only for salaried-class people earning up to ₹5 lakh. Tax slabs for females and senior citizens will remain as declared in the budget.

Clarification on Tax Slabs for Males and Females

So hereafter, there is no separate tax slab for both males and females, is that correct? Both are getting up to ₹5 lakh and do not need to pay tax. If the income is between ₹5 lakh and ₹8 lakh, there is a 10% tax, and for income above ₹8 lakh, there is a 20% tax only. Is that correct or not? I need a clear and brief explanation.

Please go through my first input properly. It is all about not filing IT returns. It is not about not paying taxes. Exemption from filing IT returns is only for salaried class people earning up to 5 lakhs per annum.

Notification Exempting Individuals Having Income Less Than 5 Lakh from Furnishing Income Tax Return

NOTIFICATION NO. 36/2011 [F. NO. 142/09/2011 (TPL)]

DATED 23-6-2011

In exercise of the powers conferred by sub-section (1C) of section 139 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby exempts the following class of persons, subject to the conditions specified hereinafter, from the requirement of furnishing a return of income under sub-section (1) of section 139 for the assessment year 2011-12, namely:

Class of Persons

1. An individual whose total income for the relevant assessment year does not exceed five lakh rupees and consists of only income chargeable to income-tax under the following heads:

- "Salaries";
- "Income from other sources," by way of interest from a savings account in a bank, not exceeding ten thousand rupees.

Conditions

2. The individual referred to in paragraph 1:

(i) has reported to his employer his Permanent Account Number (PAN);

(ii) has reported to his employer the incomes mentioned in sub-paragraph (B) of paragraph 1 and the employer has deducted the tax thereon;

(iii) has received a certificate of tax deduction in Form 16 from his employer which mentions the PAN, details of income, and the tax deducted at source and deposited to the credit of the Central Government;

(iv) has discharged his total tax liability for the assessment year through tax deduction at source and its deposit by the employer to the Central Government;

(v) has no claim for a refund of taxes due to him for the income of the assessment year; and

(vi) has received salary from only one employer for the assessment year.

3. The exemption from the requirement of furnishing a return of income-tax shall not be available where a notice under section 142(1) or section 148 or section 153A or section 153C of the Income-tax Act has been issued for filing a return of income for the relevant assessment year.

4. This notification shall come into force from the date of its publication in the Official Gazette.