Individuals income of less than Rs 5 lakhs need not file tax returns, For others its Sahaj and Sugam
The Union Budget for the year 2011-12 had announced that individuals with income of less than Rs 5 lakhs need not file tax returns. Form 16 issued by employers for employees is called income tax returns. However, if an individual within the salary limit has other sources of income such as dividends, interest etc, he needs to disclose them to the employer for tax deductions. All employees with income higher than the Rs 5 lakhs limit are supposed to pay tax as per the present rules. This comes into effect from June 1, 2011.
It will help cut the paperwork, time and costs involved. It helps the salaried employees as they need to maintain only Form 16 (which is usually in digital form) now, rather than the paper-based returns. In case your salary is less than Rs 5 lakhs, there is no need for you to file your tax returns. All you need to do is maintain a copy of Form 16 which you will receive from your employer. Even if your gross salary is more than Rs 5 lakhs, the returns need not be filed in case your total taxable salary is less than Rs 5 lakhs.
In case your salary is less than Rs 5 lakhs but you have income from other sources such as dividends, interest etc, and you do not want to file returns, you will have to disclose the other incomes to your employer for tax deduction. The Form 16 issued to you then will be treated as your income tax returns.
This move is expected to bring relief to about 80 lakh people. It will be applicable in the assessment year 2011-12 for the income earned in 2010-11.
It will reduce the burden for small taxpayers. Of late, many major steps have been taken towards simplification of filing income tax returns. New forms, Sahaj and Sugam, been introduced. The new returns forms are in line with the government's efforts towards make filing of returns simpler and user-friendly.
While Sahaj is for salaried segment, Sugam returns form is applicable for small businessmen and professionals covered under presumptive taxation. Under the presumptive taxation, a person carrying on a business will not be required to get his accounts audited if the annual total sales turnover or gross receipts are less than Rs 60 lakhs. The limit was increased in the 2010-11 Union Budget from Rs 40 lakhs. The presumptive tax limit in case of professionals was increased to Rs 15 lakhs from Rs 10 lakhs. Also, senior citizens (60 years and above) filing returns for incomes from pension, dividends, interest and property will not be subjected to scrutiny.
