Monday, 23 July 2012

Rs. 5 Lakh Income, No Income Tax Return for 2102-13

The Central Board of Direct Taxes Issued a notification which is same as last year that a salaried employee with a net income of Rs. 5 Lakh or less should not file Income Tax Return for the assessment year 2012-13 (Financial year 2011-12) with certain conditions.

Who should not file Income Tax Return

Salaried employees those who fulfill the following conditions should not file income tax return for the assessment year 2012-13.

Those who have a net income up to Rs. 5 Lakh

Income should be from Salary and interest on Savings Bank account.

Interest form savings bank account must not be more than Rs. 10000 in the year.

Total net Income should not be more than 5 Lakh.

Net income is the total income after all deductions (Income tax exemptions) under section 80C, 80CCC, 80CCF, 80D etc. to 80U of income tax act.

Interest income should be reported to the employer

Employer must deduct TDS for the interest and salary.

No balance tax should be payable.

Whole tax liability must be covered in TDS.

Employer must issue TDS certificate in Form No. 16

Employee should not have any other income other than Interest on SB account and salary

Employee should not have income (or loss) on house property including interest on housing loan.

Who could not avail this benefit of not filing Income Tax Return

With the following reason an employee could not avail the benefit of non filing income tax return, even if he or she has an income less than Rs. 5 Lakh

  1. Income includes income from house property.

  2. Interest on housing loan to be deducted from income.

  3. Capital gain (Long term or short term).

  4. Form No. 16 could not be received from the employer.

  5. Worked under more than one employer in the financial year.

  6. Have Interest other than Savings bank account.

  7. Interest on Savings bank account more than Rs. 10000.

  8. Any other income other than salary and Savings bank interest.

  9. Any loss to be adjusted.

  10. Tax refund to be received.

  11. Self assessment tax paid by the tax payer.

  12. Advance tax paid by the tax payer.

  13. Income of minor to be added.

  14. Interest could not report to the employer.

  15. Employer does not deduct TDS on interest.

  16. Interest from fixed deposit.

  17. Interest on NSC.

  18. Nonresident tax payer.

  19. Received any notice from ITO to submit return.


If any of the abovementioned conditions are applicable to an employee, he or she should file income tax return even if the total taxable income is less than Rs. 5 Lakh.

There are about 85 lakh salaried people in India those who have a net annual income less than Rs. 5 Lakh. However, only a few can avail the benefit of no filing income tax return. Because, most of them could not satisfy these conditions to avail this benefit.  Many taxpayers may not report the savings bank interest to the employer in time. Most banks credit interests in two half yearly installments and may be in august and February. The tax payer may not listen it and report to the employer in time.

It is not convenient to report the interest to the employer in February, when there are many employees and have a separate accounts wing or accounts office.

If the Income Tax Department allow this benefit continues to the next assessment year more employees can avail the benefit of non filing income tax return, because, the interest on savings bank account is exempted from tax up to Rs. 10000 in the financial year 2012-13.

This is convenient for those who satisfy the conditions. They can avoid the difficulties of filing income tax return.

No Income Tax Return upto Rs. 5 Lakh


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