Ritesh Jain (Self) 24 June 2011

No need to file ITR if income below 5 Lakh

Government of India / Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
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New Delhi, dated the 23rd June, 2011

PRESS RELEASE
The Central Board of Direct Taxes has notified the scheme exempting salaried
taxpayers with total income up to Rs.5 lakh from filing income tax return for assessment year
2011-12, which will be due on July 31, 2011.
Individuals having total income up to Rs.5,00,000 for FY 2010-11, after allowable
deductions, consisting of salary from a single employer and interest income from deposits in
a saving bank account up to Rs.10,000 are not required to file their income tax return. 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.
Persons 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.
The scheme shall also not be applicable in cases wherein notices are issued for filing
the income tax return under section 142(1) or section 148 or section 153A or section 153C of
the Income Tax Act 1961.
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1 Replies

Ca Atul (Partner ) 25 June 2011

That a great move by the Government of India.

Precautions to be taken:

1) Please note that the circular speaks about saving bank interest only and no other interest like interest on FD, Inerest on Unsecured Loans, NSC interest etc. so if your interest part consits of these items, you have to file the return

2) Now while avaling the loan from banks or financial institution by the individual, these insitutions asks us to provide three years income tax returns. What will happen to this?. Necessary instructions through GOI should be given to all such institutions. Or else better file returns.

3) Please note that only salary class is covered under this circular and no others. i.e. to say that if a person is having income from other sources only and even if it is below Rs.5.00 lacs, still he will have to file return of his income.

4) Personal opinion: Atleast for this FY i.e 10-11 one should file his income tax return untill further clarification.