If you are salaried, you are no more required to file an IT return – provided you meet some conditions. Read on for more details.
Here is a welcome relief to all tax payers after a long time – a certain section of salaried people would no longer be required to file an income tax return (ITR) going forward.
But is there a catch? Yes – this exemption from filing the ITR is available provided you meet certain conditions.
The conditions
- Your should only have salary and interest income. You should not have income under any other head, like income from house property, capital gains or income from business / profession.
- Such an income should not be more than Rs. 5,00,000 (Rs. 5 Lakhs) in the year.
- You report any interest or dividend income to your employer, so that they can include it in your Form 16
If you meet the above conditions, the Form 16 issued to you by your employer would be treated as your income tax return.
Note: For the purpose of Income Tax, pension is treated as salary. So, this provision is applicable to you even if you are a pensioner – as long as you meet the above conditions.
When does this become applicable?
This exemption from filing an ITR is applicable immediately – starting from FY 2010-11 (AY 2011-12). That is, if you meet the above conditions, you need not file any income tax return this year. (A notification to this effect would be issued shortly.)
(Want to know what terms like FY and AY mean? Please read “Income Tax (IT) Jargon – Financial Year (FY), Assessment Year (AY)“)
Is this exemption from filing an ITR really applicable to you?
Although it sounds great, this exemption would not be applicable for many working people having an income less than Rs. 5 Lakhs.
This exemption is not applicable to you if any one of the following is true for you:
- You have a home loan and you are claiming tax benefit for paying the EMIs, because the tax benefit claimed for paying the interest is a “loss” under the head “income from house property”
(Also read: “Income Tax (IT) Benefits of a Home Loan / Housing Loan / Mortgage“) - You buy and sell shares or mutual funds, because any profit or loss is a gain / loss under the head “capital gains”
(Also read: “Direct investment in Stocks versus Mutual Funds (MFs)“) - You have to claim a refund
Since most young salaried people have a home loan and / or invest in the stock market, a large chunk of tax payers having incomes less than Rs. 5 Lakhs a year would still be required to file an income tax return (ITR).
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