filing Income Tax Return

Query 1]

I had retired from Central Govt. (Age 62 Years) and getting pension. My total income with pension and interest from Saving account in Bank/ CTZ A.C of Post Office is Rs. 5 Lacs p.a. Kindly confirm the following through mail and oblige me:

1. Whether I have to submit the I.T Return for FY 2010-11 (Ass. year 2011-12.)?
2. If so, Form 16 will be required to submit with return and who will provide /Issue me the Form 16 to enclose with Return. (I am receiving pension from PAO-GSI, Nagpur)

3. I have some FD in Banks and interest with maturity on FD is payable after
   April-2012. Whether I have to show these interests in FY 2010-11?

[qumarabbas_zaidi1983@yahoo.com]

Query 2] My gross total income is Rs. 2, 81,760/- from 01^st Apr-10 to 31^st Mar-11 as per F-16.  Total deduction in respect of saving is Rs. 25,135/-.  I have already paid tax of Rs. 6,606/-. In the recent past, it was published in newspaper that assessee whose income is up to Rs. 5, 00. 000/- need not submit income tax return.  I would like to know from you, in my case, I have to submit the return or not?  Further I would like to know if any one takes home loan and in that case he/she has to submit the return though yearly  income is upto Rs. 5,00,000/-? [susantakumardutta@yahoo.com]

 

Opinion:

1. The Central Board of Direct Taxes has notified the scheme exempting salaried taxpayers with total income up to Rs.5 Lacs from filing income tax return for the assessment year 2011-12 vide Notification No. 36/2011. Individuals having total income up to Rs.5,00,000/- for FY 2010-11, after allowable deductions, consisting of salary from a single employer and interest income from deposits in a saving bank account up to Rs.10,000 are not required to file their income tax return.
2. We are producing hereunder the key elements of the circular for the mass benefit of our readers as under:
   12. This exemption is available to Individual assessee only & is available for Assessment year 2011-12.
   13. Total Income (after deduction 80C to 80U) of Individual must be up to 5,00,000/- only.
   14. Income must be earned from Salary and/or Saving Bank Interest up to Rs 10000/-. (It may be noted that Pension is also covered under salary head).
   15. Individual must have reported his PAN to his employer.
   16. Assessee has earned salary only from one employer during the year.
   17. Assessee has reported his income from saving Bank Interest to his employer for TDS purposes.
   18. Employer has deduct the tax on his Full income, salary plus interest (if any), and TDS has been deposit in Government Treasury by the employer.
   19. No refund is due to Assessee.
   20. Individual has received Form No. 16 from the employer, which mentions PAN, Income detail and Tax deducted and deposit detail.
       If all the above conditions are satisfied then one can get immunity from filing Income tax return for the financial year 2010-11.
3. Subject to basic stipulation mentions above, it may be noted that the following classes of Assessee would be required to file the return of income & no immunity from filing income tax return would be available:
   1. If his total income includes any one of following Incomes
      – Income from House property [Including minus Income from interest on House Loan].
      – Income from Business/profession
      – And Income from capital gain
      – Also Income from Interest other than Interest from saving bank up to Rs. 10,000/- (If assessee have Interest from FDR then he can not claim exemption from return filing)
      – Any other Income under “Income from other source”
   2. If Assessee has not reported his Saving Bank interest income to his employer for tax deduction purpose.
   3. If Assessee has discharged his tax liability through advance tax or self assessment challan.
   4. Else If Assessee has received salary from more than one employers during the year.
   5. And If assessment year is other than 2011-12.

4. The circular exempting return filing with income up to Rs. 5 Lacs though good & pleasing is not of much benefit to the Assessees at large. Most of Salaried persons may not be able to avail this exemption this year because of the following:
   a]. Very few employees declared saving Bank interest to their employer. Even few employers are also reluctant to consider other income of assessee for TDS deduction .As a result of this, even though most of the salaried persons who are having total Income below Rs. 5 Lacs can not avail this exemption. Had this circular be issue in Feb-March 2011, the position may has be different.
   b]  Interest Limit has be fix up to 10,000/- only. Further that is also restrict to saving bank interest only .Person having salaried income up to Rs. 5,00,000/- may have FDR Interest or other Interest income . Even assessee having FDR interest plus saving interest less than Rs. 10,000/- can not avail this Exemption.
   Specific Replies to Query No. 1] For record purpose, you are advised to keep the Form No. 16 with you. You can get it from PAO-GSI.

   2. As far as interest on bank FD is concerned:

   a] The interest to be offer for taxation depends upon the method of accounting regularly follow by the assessee in recognizing the income. If Assessee is following cash (Receipt) system of accounting then the interest income has to be offer at the end of FD Tenure. If Assessee is following mercantile (Accrual) system of accounting then interest income is require to be offer for taxation every year as income of that year only.
   b] In view of the Circular No. 371 dated 21.11.1983 issued by the Central Board of Direct Taxes (CBDT), we advise our readers to offer the interest on Bank FDR on accrual (due) basis only.

filing Income Tax Return

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