No Need to file Tax Return if your income is less than 5 Lakhs

In a welcome move, the Central Board of Direct Taxes has proposed that salaried taxpayers whose taxable income, including salary and interest income is up to Rs 5 lakh will not be required to file income-tax return from now.

However, this proposal does not cover income from other sources like house property , capital gains and gains from profession and business.

The scheme will be in force from assessment year 2011-12 onwards. This means that salaried persons eligible under the scheme would not have to file returns for the financial year 2010-11 in 2011-12 (assessment year). However, those salaried persons who want to claim tax refund, would have to income tax file return.

Under the scheme, the salaried person seeking 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 mandatory for all salaried persons to file income tax return under the Income Tax Act, 1961.