Relief for Salaried assessees having income less than 5 Lakhs !!!

The Income-tax department, vide its NOTIFICATION NO. 9/2012 [F. NO.225/283/2011-ITA(II)], DATED 17-2-2012 has exempted the persons (salaried assessees) with income less than 5 lakhs from furnishing their return of Income.

For whom this benefit is available ?

1)      The assessee should be an Individual; and

2)      The Total Income does not exceed Rs. 500000/- . Here Total income means, income after claiming exemptions, deduction u/s. 80C,etc.,.; and

3)      Such total income shall be ONLY from the following heads:-

i)                    “Salaries”

ii)                  “Income from other Sources” , by way of Interest from a Savings account in a bank, not exceeding Rs. 10,000/-.

Conditions for availing this benefit :-

1)      The salaried employee has to report correct PAN to his employer.

2)      The salaried employee has to correctly declare his income from Savings Bank Interest to the employer and the employer has to deduct the tax there on.

3)      The salaried employee has to obtain Form 16 from his employer with the details of PAN, Income ,  Tax Deducted at Source thereon and the Tax Deposit details.

4)      The salaried employee shall ensure that the tax due on the above income has been fully discharged through tax deduction at source and the same has been deposited by the employer into the Central Government account.

5)      The net result of Tax computation shall not be refund.

6)      The salaried employer has received salary from only one employer during the year.

7)      The Income-tax department should not have issued any notice to the assessee requiring him to file his return of Income.

Only if ALL the above conditions are satisfied, the assessee can avail the benefit of non filing of his return of Income. If any ONE of the above conditions is not satisfied, the assessee has to necessarily file his/her return of income.

Myths & Facts :-

Sl. No.




The basic exemption limit has been enhanced to Rs. 5 Lakhs The basic exemption limit has not been enhanced. The relief is in respect of return filing requirements only.


All assessees with Rs. 5 Lakhs of Income need not file their return of Income. Only assesees having Income from Salary & Interest on Savings Account having total income less than 5 Lakhs can make use of this provision. All other assessees shall file their return of income even if the Income is  less than Rs. 5 Lakhs.


Assessees with income upto Rs. 5 Lakhs need not pay tax. Tax due has to be necessarily discharged/paid by way of Tax deduction at Source by the employers.


There is no obligation on the part of the assessee with income less than 5 Lakhs It is necessary that the assessee declares his Interest income upto Rs. 10000/- to his employer and the tax due on the same has been deducted at source.


Salaried employees need not declare their income other than Salaries & Interest on SB account. If the assessee has other sources of income (viz.,) Capital Gains, Rent, FD Interest,Business , etc., he has to necessarily file his return of income and pay tax irrespective of the fact that the income is below or above 5 Lakhs.


Only TDS certificate (Form 16) from the employer is sufficient. Not only the TDS Certificate, the remittance of TDS deducted on account of salaries to Central Government account shall also be ensured by the employee.


Salary income means income after considering the Interest on Self Occupied Housing Loan. Salary Income does not include the loss arising on account of Interest on Housing loan in respect of Self Occupied/Let out Property. Hence , if an assessee has any Interest on Housing loan to be claimed, he has to file the return of Income compulsorily.

Other Points :-

  • Even if there is a small amount of tax payable/refund , this benefit cannot be availed. Hence , as per Form 16, the Final tax payable should be “NIL”.
  • If the assessee has been employed with more than one employer during the year, this benefit cannot be availed.
  • If the assessee has Salary and Interest income below 5 Lakhs but has not furnished the Interest Income details to his employer for inclusion in the Form 16, this benefit cannot be availed.
  • Many banks and financial institutions require the copies of the Income-tax returns to consider the loan applications. In the absence of filing, the applicants may face hardship in obtaining a loan.
  • Assuming a salaried assessee is maintaining a minimum balance of Rs. 10,000/- in a savings account, his Savings Bank Interest for a year will be RS.800/-. (Assuming the rate of Interest @ 8%) . On account of this provision, the assessee’s tax liability will be more by Rs. 80/- (Rs. 800/- x 10%). Till last year, many of the salaried employees would not have declared this income and paid tax on the same.

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The relevant notification is reproduced below :-

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