Monday, February 20, 2012

EXEMPTION FROM INCOME TAX RETURN FILING UP TO 5 LAKH FOR SALARIED EMPLOYEES


   

CBDT has issued a notification 9/2012 by which Income tax return for salaried class persons has been exempted if total income is less than 5,00,000 ,subject to some conditions 

.The conditions and wording of the notification is identical with last year notification and same is the timing late,so that no body can avail this exemption in correct sense.

As per new notification  Income tax return is not required to filed by Salaried employees if their total Income is less than 500000(five Lakh) and they are satisfying few Conditions 

.Income Tax department has issued notification no 9/2012 in this regard .

This exemption is available only to specific category of employees .
Following conditions are to be satisfied to claim exemption from return Filing .

Who can Claim Exemption 
This exemption is available to Individual assessee only (He may be resident or not)
Exemption is available for Assessment year 2012-13
Total Income(after deduction 80C to 80U) of Individual must be up to Five Lakh Rupees only.
Income must be earned from Salary and/or Saving Bank Interest up to Rs 10000/- .Pension is also covered under salary head.
Individual must have reported his pan to his employer.
He has Earned salary only from one employer during the year.
He has reported his income from saving Bank Interest to his employer for TDS deduction purposes.
Employer has deducted the tax on his Full income,salary plus interest {if any},and tds has been deposited in Govt account by the employer.
No refund is Due to assesse .
Individual has received Form 16 From the employer ,which mention PAN, Income detail and Tax deducted and deposit detail.
If all the above conditions are satisfied then you can are exempted to file Income tax return for Financial year 2011-12
Who can not claim exemption 
If His Total taxable income after deduction u/s 80C to 80U is more than 5 (five) Lakh rupees.
If refund is due to Him .
If  his total income includes  any one of following Incomes 
Income from House property Including minus Income from interest on House Loan.
Income from Business/profession
Income from capital gain
Income from Interest other than Interest from saving bank up to 10000.Suppose you have earned interest from FDR then you can not claim exemption from return filing.
Saving Bank interest is more than 10000 rupees.
Any other Income under "Income from other source"
If He has not offered his Saving Bank interest income to his employer for tax deduction.
If he has discharged His  tax liability through advance tax or self assessment challan.
If he has received salary from two employers during the year.
If  he has not submitted his PAN to his employer.
If Form 16 has not been issued to Him by His  employer.
If notice u/s 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
If assessment year is other than 2012-13.
Clarification dated 25.07.2011

The above notification for exemption is optional for Assessee and he may or may not avail this exemption.
Means even your have satisfied all the conditions given in the notification ,you can file your return.if you want to do so. .
 Income tax department has issued few FAQ about notification last year .As the wording of the notification is similar to the last year notification so the FAQ are applicable on this year notification also
FAQ about exemption from return filing by CBDT available here

Most of Salaried persons may not avail This exemption this year !!why?
This circular is Good for Salaried persons But Most of them is not able to fulfill conditions given in the Notification. Very few employees declared saving Bank interest to their employer . Even employer are reluctant to consider other income of assessee for Tds deduction .So due to this reason most of the salaried person having total Income can not avail exemption given under this notification.
Second Point is Interest Limit has been fixed up to 10000 only.Further that is also restricted to saving bank interest only .Person having salaried income up to 500000 may have FDR Interest or other Interest income . I am not able to under stand ,why nature of Interest has been restricted if monetary limit has already been specified . Now person having FDR interest plus saving interest less than 10000  can not avail this Exemption also.
Notification is given below.

SECTION 139 OF THE INCOME-TAX ACT, 1961 - RETURN OF INCOME - EXEMPTION TO SPECIFIED PERSONS FROM REQUIREMENT OF FURNISHING A RETURN OF INCOME UNDER SECTION 139(1) FOR ASSESSMENT YEAR 2012-13
NOTIFICATION NO. 9/2012 [F. NO.225/283/2011-ITA(II)], DATED 17-2-2012

S.O........... (E). - In exercise of the powers conferred by sub-section (IC) 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 2012-13, namely:-

1. Class of persons. -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 head,-

(A) "Salaries";

(B) "Income from other sources", by way of interest from a saving account in a bank, not exceeding ten thousand rupees.

2. Conditions,- The individual referred to in para 1,-

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

(ii) has reported to his employer, the incomes mentioned in sub-para (B) of para 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 of 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.

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