Come next year, salaried employees who earn less than Rs 8 to 9 lakhs a year will not have to through the hassle of filing their annual income tax returns.
According to the budget for 2011-12, from June 2011, government would change the laws to make it unnecessary for salaried employees to file annual IT returns.
Even if the employees get “a slight amount” of income from non-salary sources like interest and dividend, they still need not file their income tax returns, officials said.
They will, however, have to declare the extra income to their employers and have the latter deduct tax on the same as well. The acknowledgement given by the employer would then serve as their tax returns.
Chairman of the Central Board of Direct Taxes Sudhir Chandra said the exercise is aimed at avoiding hassles for the salaried class of people as well as getting rid of duplicate data with the Income Tax Department.
“The employers anyway send in all the details of the employees earnings, the tax deducted, how it was filed etc.. There is no need for the employees to state all that again in a separate form,” he said.
The catch is that the total taxable income should not be more than Rs 5 lakh or so — though the exact ceiling will be announced later. In other words, an employee earning less than Rs 7 lakhs a year, including from interest and other sources, would qualify while those earning up to 10 lakhs a year too could qualify if they reduce their taxable income by investments and other deductions.