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Some Relief for filing IT Returns this July 2012

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Every year in June-July, there is a last-minute scramble among assesses to file income tax returns. With employers giving out Form 16, the scramble gets intense. Though many forget to file returns on time, it is a mandatory exercise.

Most taxpayers believe those earning an income have to compulsorily file tax returns. But things have changed. Not everyone, earning an income in an assessment year, need to file returns as long as they've paid it and have a certificate to prove.

Here is some help

A salaried tax payers entire tax liability is discharged by the employer through tax deduction at source (TDS). And when the employer reports the details of tax it has deducted in a year through TDS statements, it also gives details of the taxpayers from whom the tax was deducted.

If you are one such individual and have no other source of income, you need not file tax returns as it will mean unnecessary duplication of the existing information.

Last year, the income-tax (I-T) department had said those with taxable income of Rs5 lakh and interest earnings on savings accounts of less than ~10,000 would not have to file income tax returns.

The department has extended this norm for the year 2012-13.

However, the I-T department wants individuals to report their permanent account numbers (PAN) and income from bank interest to their employers, pay TDS and get a certificate of tax deduction (Form 16) to avail this benefit. But tax refund cannot be claimed in case of capital gains from sale of equities and foreign assets in the past 16 years. In such a case, return has to be filed.

The Union Budget 2012s much talked about regulations on reporting foreign assets has respite for non-resident Indians (NRIs) or Resident but Not Ordinarily Residents (RNORs) from filing tax returns in India. Such individuals need not file returns if they own or are signatory authority or have financial interest in foreign assets worth less than ~2 lakh.

Simply put, an RNOR is a person residing in India, but has been an NRI earlier. But, he may or may not be an Indian.

Lastly, if you are a minor who has earned an income in your name but not on your merit, then your income will be clubbed with either of your parents for the purpose of taxation and returns.

For instance, interest or rental incomes earned in a minor child's name when the investment was made from his/her parents salary. If a minor earns on his own merit, like a summer job or internship, then he/she will have to file returns in their own name.

And it is not compulsory to file returns if your income is less than the basic exemption, which is ~2 lakh and ~2.50 lakh for senior citizens.

|Your tax liability has been fulfilled through TDS by employer |You earn a taxable income of ~5 lakh, interest on savings accounts of up to ~10,000 |NRIs or RNORs with foreign assets or financial interest of less than ~2 lakh |The income is earned in the name of a minor child |Your income is up to or less than the basic exemption limit, returns are not mandatory

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