Salary earners having an income of less than Rs 5 lakh will not have to file tax returns from this year, a finance ministry official said.
"Salaried people, may be up to Rs 5 lakh...they need not file the (income tax) return," CBDT chairman Sudhir Chandra told reporters at the customary post-Budget press conference.
The exemption from filing tax returns come into effect from the assessment year 2011-12.
In case such a salary earner has income from other sources like dividend, interest etc. and does not want to file returns, he will have to disclose such income to his employer for tax deduction, Chandra said.
As many as 85 lakh salaried tax payers with an annual income of up to Rs 5 lakh will not have to file income-tax return from now onwards, a finance ministry official said.
"No income-tax returns would be required for salaried persons earning up to Rs 5 lakh per annum. We would notify this in first week of June," outgoing Chairman of Central Board of Direct Taxes Sudhir Chandra told reporters here.
The scheme would be applicable from assessment year 2011-12 onwards. This means that the 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 tax payers would have to file return if they want to claim refunds, Chandra said. As per the Memorandum to the Finance Bill 2011, the government will be issuing a notification exempting 'classes of persons' from the requirement of furnishing income tax returns.
In case such a salary earner has income from other sources like dividend, interest etc and does not want to file returns, he would have to disclose such income to his employer for tax deduction.
In the scenario, the Form 16 issued to salaried employees will be treated as Income Tax Return. The idea behind the move is that in cases where there are no other sources of income, filing of a return is a duplication of existing information.
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