Financial Bill 2011 – No Tax Return for Salary, Interest Income Up to Rs 5 lacs

Now after sky rising inflation , it’s some relief for Tax payers. Central Board of Direct Taxes has announced a press statement stating that “No income-tax returns is required for salaried persons whose annual annual taxable income including salary and interest is up to Rs 5 lakh. We would shortly notify this”.

This new rule will apply from the current assessment year (2011-12) for the income earned in 2010-11, but all such Tax payers who want tax refund need to file returns.

It is said that the idea was generated from Finance Bill 2011,under which the government will be issuing a notification exempting ‘classes of persons’ from the requirement of furnishing income tax returns. This will help in such cases where there are no other sources of income, filing of a return is a duplication of existing information.

Under the scheme, the salaried person wants exemption from filing IT return, has to disclose about the incomes like dividend and interest to his employer for tax deduction.

In the scenario, the Form 16 issued to salaried employees will be treated as Income Tax Return. At present, it is obligatory for all salaried persons to file income tax return under the Income Tax Act, 1961.