Exemption from Filing ITR

By: Raman Aggarwal

The CBDT has exempted certain class of assesses from filing the Income Tax Return after the accomplishment of following conditions:

Ø      Assessee should be an individual.

Ø      Income of the assessee does not exceed Rs. 5 Lac.

Ø      Income is chargeable under the head Income from Salaries.

Ø      Interest income should be less than Rs.10000 from the saving bank account. 

If any individual assessee has income from interest of Fixed Deposit or Rental Income from House Property or any Income from Capital Gain or Gain from Business or Profession or any Speculation Income from share transaction, then assessee will not be eligible to claim the benefit of “Exemption from filing Income Tax Return”. 

There are some other conditions also for availing this benefit-

Ø      Assessee has reported the Permanent Account Number (PAN) to the employer.

Ø      Assessee has reported all the income & full details of deduction under section 80C to the employer and employer has deducted the TDS.

Ø      Assessee has received TDS certificate in Form No. 16 from their Employer.

Ø      Employer has deposited the TDS amount to the Central Government.

Ø      Assessee has no claim of refund of taxes.

Ø      Assessee has received Salary only from one employer and if any assessee changes their job in middle of the Financial Year, assessee has to file the return. 

If any notice u/s 142(1), 148, 153A or 153C of the Income Tax Act, 1961 has been issued for filing an Income Tax Return for the relevant assessment year then the exemption from filing Income Tax Return will not available.

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Why we should file the return? If salary is less than 5 Lakh

By: Abhishek Ranjan Singh

Why we should file the return? If CBDT exempts return-filing for salaried having total income upto Rs 5 Lakh.

IN MY OPINION IT IS ALWAYS BETTER TO FILE THE RETURN

Some reasons:

1.The tax department has notified that individuals with salary income below Rs 5 lakh are not required to file their tax return subject to certain conditions* being met. Though this move would benefit the new entrants to employment, for others this rule is nothing but increased confusion in deciding whether to file tax return or not.

*Conditions for exemption from filing tax return under Rs 5 lakh rule:

A. Single employer income.

B. Savings account interest up to Rs 10,000.

C. PAN should be correctly declared to the employer.

D. Employer should have deducted tax on both salary & savings account interest.

Accordingly, an individual who has income from multiple employers or FD/term deposit interest or house, wherein she/he is claiming interest deduction would need to file her/his tax return.

2. How can you declare your Saving Bank Account Interest income of year ending March to your employer before year ending to deduct the TDS. 

3.When you file your tax returns every year, you manage to create your financial record with the tax department.

This financial/tax history is positively viewed and favourably used by most agencies with whom you may need to interact, such as when you avail any kind of loan (home, personal, vehicle loan, etc), when you apply for VISA etc.

4.Proof of (financial) life.

Income tax return is essential for making any investment and goes to prove that you have a valid source of income to make such investment.

Considering the above points, filing your tax return seems to be a GOOD IDEA.