Employees with Salary Below 5 lac May be Exempt from Filing ITR

A section of employees with salary below a certain limit (proposed to be Rs 5 lakh) may not need to file income tax returns this year, said chairman of the Central Board of Direct Taxes, Sudhir Chandra. However, if the salaried person has income from other sources, such as interest income from savings bank account or fixed deposits, dividend, etc. and does not wish to file return, such income will have to be disclosed by him to his employer for deduction of tax. The Form 16 issued by the employer to salaried employees may act as their Income Tax Return.
The government, however, is yet to work out a scheme around this and will issue a notification soon. Currently, every person with income above the taxable limit is required to file tax returns. Filing income tax return is strongly suggested since it helps one keep a record of his/her tax history and facilitates important applications such as home loan and visa.