Exemption from Filing of return for Salaries Employees

No.402/92/2006-MC (14 of 2011)

Government of India / Ministry of Finance

Department of Revenue

Central Board of Direct Taxes


New Delhi, dated the 23rd June, 2011


The Central Board of Direct Taxes has notified the scheme exempting salaried

taxpayers with total income up to Rs.5 lakh from filing income tax return for assessment year

2011-12, which will be due on July 31, 2011.

Individuals having total income up to Rs.5,00,000 for FY 2010-11, after allowable

deductions, consisting of salary from a single employer and interest income from deposits in

a saving bank account up to Rs.10,000 are not required to file their income tax return. Such

individuals must report their Permanent Account Number (PAN) and the entire income from

bank interest to their employer, pay the entire tax by way of deduction of tax at source, and

obtain a certificate of tax deduction in Form No.16.

Persons receiving salary from more than one employer, having income from sources

other than salary and interest income from a savings bank account, or having refund claims

shall not be covered under the scheme.

The scheme shall also not be applicable in cases wherein notices are issued for filing

the income tax return under section 142(1) or section 148 or section 153A or section 153C of

the Income Tax Act 1961.

Our Views :-

The salient features of this Notification are as follows :-
1) This is applicable for the A.Y.2011-12 (Financial year 2010-11)
2) This is applicable only for salaries employees with Total Income (after considering all deductions) is less than 5 Lakhs.
3) Under this scheme salaried employees with income (after deductions) upto Rs. 500000 and having Interest on Savings bank account upto Rs.10000 shall not file their income-tax returns provided they declare their entire income to the employer and the tax is deducted on the same and Form 16 is issued.
This scheme is not applicable in respect of following cases :-
1) Employees employed with more than 1 employer during the year.
2) Employees with refund claims
3) Employees with any other sources of income other than salary & interest on savings bank deposit (example, FD Interest,Capital gain on sales, rent,etc.,)
4) Cases where the Assessment proceedings have been initiated under section 142/148/153A/153C of the Income tax Act,
Quote :-
Practically this benefit cannot be used by the employees for the A.Y.2011-12 (F.Y.2010-11) since the due date for filing Quarterly returns is over and by now all the companies would have issued Form 16 without considering the Bank Interest from Savings account.