Tax exemption for employees whose salary is less than Rs. 5 lakhs

The Finance Ministry on Friday said that the salaried employees whose annual income is upto Rs. 5 lakhs need not file income tax returns from this year. The exemption from filing the IT returns is applicable only if the total income of the employee does not exceed Rs. 5 lakhs and the annual interest rate earned from the savings bank account is less than Rs. 10,000 for the year 2012-13. But however filing of IT returns is a mandatory clause in case of claim of refunds.

The last date for filing returns is July 31. In India there are about 85 lakh salaried employees whose yearly income including income from other sources like bank deposits does not exceed Rs. 5 lakhs. He exemption is permissible only if the assess e possess a certificate of tax deduction in Form 16 from the employer.

The employees have to report to the employer about his income from interest on savings bank account  to become eligible to be exempted. Prior to this amendment, it was obligatory for all salaried persons to file income tax returns under the Income Tax Act, 1961. Meanwhile, the tax department said special counters will be set up in Delhi and tax kiosks in various parts of Mumbai to assist people in filing IT returns.

Tax department is proposing to receive the returns at Civic Center, opposite Ramlila Maidan, New Delhi from July  26 to 31. The Mumbai Income tax department will set up tax kiosks manned by tax return preparers at various locations to assist tax payers in the preparation and filing of returns.

News reported by AR for News Vision online news blog