The finance ministry has good news for you if you are earning Rs. 5,00,000/- or less per year. Finance Minister Pranab Mukherjee has announced about the proposal to excuse the filling of tax returns of the salaried employees to reduce the conformity burden on the small taxpayers. According to the proposal, an employee who draws a total salary of Rs. 5,00,000/- or less, after all deductions, in the financial year of 2010 - 11, will be exempted from the grind of filling tax returns vide notification No. 36/2011 dated 23.06.2011. This is expected to benefit more than 5 million taxpayers. However there is a set of clauses set to decide whether or not you are eligible for this benefit.
Here at SSER, we have put our heads into the thoughts, gone deep into the predicament and have analyzed the issues. The following few lines is our endeavor to highlight the essential issues and their implications related to the matter. We expect this Article will reach out to the parlor of common man those who are directly or indirectly connected with the issues and for whom our Legal Research Service is extended.
Who are benefited from this scheme?
Individuals with incomes at or below Rs. 5,00,000/- and earning less than Rs. 10,000/- as interest from their savings accounts can be exempted from filling tax returns. This is only applicable for deduction of tax at source of the individual's income, which must have been accumulated from a single employer. Individuals who get an interest income of below Rs. 10,000/- have to declare the amount to the employer and get the tax deducted to avail the exemption. For this the employee has to state his PAN (Permanent Account Number) to his employer and get Form No. 16, as the certificate of tax deduction.
Who are not exempted under this scheme?
It is good to know that having an income of Rs. 5,00,000/- will save you from the trouble of filling tax returns. However, this exemption comes with some limitations. The taxable salary income of an individual must be drawn from a single employer, which means that if he/she has changed jobs in the middle of the year 2010 - 11 then he/she has to file returns, merging income from all employers. Even employers with more than Rs. 10,000/- as their interest income on their saving deposits cannot avail this exemption.
People who have income from refund claims and sources like mutual funds, shares and fixed deposits other than the salary are not covered by this scheme. Moreover, the scheme also doesn't extend to a person whose income has escaped evaluation or the returns have turned up for scrutiny and have received notice under Section 153C or Section 153A or Section 148 or Section 142 (1) of the Income Tax Act 1961.
Here's how the exemption works
Interestingly, individuals earning within the range of Rs. 6,50,000/- to 8,00,000/- will be eligible to avail this exemption. You must be thinking how? If your income is Rs. 6,50,000/- and you have some investments, like Rs. 1,00,000/- under Section 80C (Public Provident Fund, Employees Provident Fund, five-year bank fixed deposits, life insurance, equity-linked saving schemes), Section 80D (Rs. 15,000/- towards health insurance for yourself and Rs 20,000/- for parents) and Section 80CCF (Rs. 20,000/- in infrastructure bonds). After all this, your taxable salary amount will come to Rs. 4,95,000/-, you can avail the exemption. Similarly, even after all the above investments, you pay Rs. 1,50,000/- interest on a housing loan, you can still gain exemption even if your earning is Rs. 8,00,000/-.
According to experts this deduction can continue even in the next year and apart from some changes in line with Direct Taxes Code, the exemption has chances of continuing. So if your total income fits into the slab offered, you can bid adieu to filling of tax returns.
This is an effort from SSER, with the assistance of Meharia & Company, reputedly largest law firm in Kolkata,Delhiand Mumbai and we have taken the onus of dealing into any matter that affects the common people. We believe our free legal advice would be helpful to them.
http://www.researchatsashwaat.com,
http://www.meharia.in
Here at SSER, we have put our heads into the thoughts, gone deep into the predicament and have analyzed the issues. The following few lines is our endeavor to highlight the essential issues and their implications related to the matter. We expect this Article will reach out to the parlor of common man those who are directly or indirectly connected with the issues and for whom our Legal Research Service is extended.
Who are benefited from this scheme?
Individuals with incomes at or below Rs. 5,00,000/- and earning less than Rs. 10,000/- as interest from their savings accounts can be exempted from filling tax returns. This is only applicable for deduction of tax at source of the individual's income, which must have been accumulated from a single employer. Individuals who get an interest income of below Rs. 10,000/- have to declare the amount to the employer and get the tax deducted to avail the exemption. For this the employee has to state his PAN (Permanent Account Number) to his employer and get Form No. 16, as the certificate of tax deduction.
Who are not exempted under this scheme?
It is good to know that having an income of Rs. 5,00,000/- will save you from the trouble of filling tax returns. However, this exemption comes with some limitations. The taxable salary income of an individual must be drawn from a single employer, which means that if he/she has changed jobs in the middle of the year 2010 - 11 then he/she has to file returns, merging income from all employers. Even employers with more than Rs. 10,000/- as their interest income on their saving deposits cannot avail this exemption.
People who have income from refund claims and sources like mutual funds, shares and fixed deposits other than the salary are not covered by this scheme. Moreover, the scheme also doesn't extend to a person whose income has escaped evaluation or the returns have turned up for scrutiny and have received notice under Section 153C or Section 153A or Section 148 or Section 142 (1) of the Income Tax Act 1961.
Here's how the exemption works
Interestingly, individuals earning within the range of Rs. 6,50,000/- to 8,00,000/- will be eligible to avail this exemption. You must be thinking how? If your income is Rs. 6,50,000/- and you have some investments, like Rs. 1,00,000/- under Section 80C (Public Provident Fund, Employees Provident Fund, five-year bank fixed deposits, life insurance, equity-linked saving schemes), Section 80D (Rs. 15,000/- towards health insurance for yourself and Rs 20,000/- for parents) and Section 80CCF (Rs. 20,000/- in infrastructure bonds). After all this, your taxable salary amount will come to Rs. 4,95,000/-, you can avail the exemption. Similarly, even after all the above investments, you pay Rs. 1,50,000/- interest on a housing loan, you can still gain exemption even if your earning is Rs. 8,00,000/-.
According to experts this deduction can continue even in the next year and apart from some changes in line with Direct Taxes Code, the exemption has chances of continuing. So if your total income fits into the slab offered, you can bid adieu to filling of tax returns.
This is an effort from SSER, with the assistance of Meharia & Company, reputedly largest law firm in Kolkata,Delhiand Mumbai and we have taken the onus of dealing into any matter that affects the common people. We believe our free legal advice would be helpful to them.
http://www.researchatsashwaat.com,
http://www.meharia.in
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