Tuesday, 1 March 2011

Budget 2011- No Income Tax Return for Salaried People up to Rs. 5 Lakh income.

The Finance Minister allowed a big relief to Salaried Tax payers that they can avoid filing income tax return, if their total income is Rs. 5 Lakh or less. The proposal is that if the income of salaried person is Rs. Five Lakh or less and the tax has been deducted as TDS such person should not submit income tax return from 01st June, 2011.

For this purpose the salaried tax payer should inform (disclose) his income from other sources such as interest, income from house property, capital gain etc. to the employer and allow him to deduct his tax accordingly and if the total income is not more than 5 lakh he should not file income tax return and this proposal will come into force from 01st June, 2011. In this case their Form 16 (TDS certificate) will consider as income tax return and duplication is not needed.

The Times of India reported that the Central Board of Direct Taxes chairman Sudhir Chandra later shed more light on Mukherjee's plans. He explained that, beginning current income year, people whose annual salary is Rs 5 lakh or less will not have to file tax returns, provided the tax on their income has been deducted by the employer and deposited with the government.

In addition to the above proposal the finance minister allowed another relief for small taxpayers, that the introduction of a new simplified income tax return form called 'Sugam'.

The above proposals give much relief for the lower level tax payers that they can escape from the difficulties of filing income tax returns. No doubt a majority of tax payers will accept this proposals and the income tax department also can avoid the difficulties of handling a lot of paper work.

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