Income Tax :- Exemption for filing ITR having Loss from House Property

Friends,  It is important to know whether ITR filing exemption notification is applicable on those taxpayers who are getting Salary and Loss from House property on account of  Interest on housing loan etc. 

Ans :-No. Under the existing procedure, DDO/employer can give credit to the  employee for a claim for loss under the head “income from house property” u/s  24 made by the employee. As a result, a salaried employee’s total income may  reduce to less than Rs.5,00,000 as loss from the head “income from house  property” would have been set-off against salary income. Such a taxpayer is not  exempted from filing his return of income as the notification exempts only cases  where the total income is under the head “salary” and from savings bank account (income from other sources) not in excess of Rs.10,000. If the taxpayer  has any loss under the head “income from house property”, he will not be  eligible for exemption from filing a return of income. 

In view of the above each and every taxpayer should study Exemption Notification for non-filing of ITR carefully before taking his final decision for non-filing of Income Tax Return. 

Click here to read Exemption Notification issued by Income Tax Department. 

Income Tax :- Exemption from Filing Return of Income Tax u/s 139(1C)

Specified class or classes of persons to be exempted from filing Return of Income [Section 139(1C)]

(1) Under section 139(1), every person has to furnish a return of his income on or before the due date, if his total income exceeds the basic exemption limit.

(2) For reducing the compliance burden of small taxpayers, the Central Government has been empowered to notify the class or classes of persons who will be exempted from the requirement of filing of return of income, subject to satisfying the prescribed conditions.

(3) Every notification issued under section 139(1C) shall, as soon as may be after its issue, be laid before each House of Parliament while it is in session, for a total period of thirty days. If both Houses agree in making any modification in the notification, the notification will thereafter have effect only in such modified form. If both Houses agree that the notification should not be issued, the notification shall thereafter have no effect.

Exemption from filing of Income Tax Return

What is the purpose of this notification and who are proposed to be exempted  from the requirement of filing of the return? 

                  The primary objective of this notification is to exempt those salaried taxpayers  from the requirement of filing income-tax returns, who have (i) total income not  exceeding Rs.5,00,000, and (ii) the total income consists only of income  chargeable to income tax under the head Salaries and interest income from  savings bank account if such interest income does not exceed Rs.10,000. 

Further, such salaried taxpayer would be eligible for exemption from filing a  return of income only if tax liability has been discharged by the employer by way  of Tax Deducted at Source (TDS) and the deposit of the same to the credit of the  Central Government. For this purpose, taxpayer has to intimate his interest 

income to the employer during the course of the year. 

For Example – (i) If an individual has salary income of Rs.4,90,000 and interest income  from savings bank account not exceeding Rs.10,000 (which has been reported to the  employer and tax has been deducted thereon), then the taxpayer would be exempt from  the requirement of filing income-tax returns since the total income from both the above  sources does not exceed five lakh rupees. 

(ii) A taxpayer having salary income of Rs.4,98,000 and interest income from savings  bank account of Rs.2,000 (which has been reported to the employer and tax has been  deducted thereon), would also be eligible under this Scheme. 

(iii) A taxpayer having salary income upto Rs.5,00,000 and nil interest income would  also be eligible under this Scheme. 

(iv) A taxpayer having salary income of Rs.5,50,000, interest income from savings bank  account of Rs.8,000(which has been reported to the employer and tax has been deducted thereon), and who has claimed deduction of Rs.70,000 under section 80C (on account of  certain payments/investments/savings) would also be eligible under the Scheme. 

(v) A taxpayer having salary income of Rs.6,10,000, interest income from savings bank  account of Rs.10,000 (which has been reported to the employer and tax has been deducted  thereon), and who has claimed deduction of Rs.1,00,000 under section 80C (on account of  certain payments/investments/savings), a deduction of Rs.20,000 under 80CCF  (Infrastructure Bonds) and a further deduction of Rs.15,000 under section 80D (Health Insurance Premium) would also be eligible under the Scheme. 

Exemption for Filing of Income Tax Return

Friends

 Income Tax Department has issued circular for Exemption of Salaried Employees from Requirement of Filing of Returns for Assessment Year 2012-13 vide Press Release [No. 402/92/2006-MC (15 of 2012)], Dated 20.07.2012. This circular makes easy an individual to know whether he is responsible for submission of his Income Tax Return or not. 

EXEMPTION OF SALARIED EMPLOYEES FROM REQUIREMENT OF FILING OF RETURNS FOR ASSESSMENT YEAR 2012-13

PRESS RELEASE [NO. 402/92/2006-MC (15 OF 2012)], DATED 20-7-2012

CBDT vide its notification No. 9/2012 dated 17th February, 2012 has exempted salaried employees from the requirement of filing the returns for A.Y. 2012-13. The exemption is applicable only if all the following conditions are fulfilled: -

  •  Employee has earned only salary income and income from savings bank account and the annual interest earned from savings bank account is less than Rs. 10 thousand.

  •  The total Income of the employee does not exceed Rs. 5 Lakh (Total Income means Gross Total Income Less deductions under Chapter VIA).

  •  The Employee has reported his PAN to the employer.

  •  Employee has reported his income from interest on savings bank account to employer.

  •  Employee has received Form 16 from his employer.

  • Total Tax Liability of employee has been paid off by employer by way of TDS and employer has deposited TDS with central government.

  •  Employee has no refund claim.

  •  Employee has received salary only from one employer.

  •  Employee has not received any Notice from Income Tax Department for filing of Income Tax return.

Exemption for Filing of Income Tax Return

Friends 

             No doubt that Income Tax Department had issued a notification regarding exemption for filing of Income Tax Return. But there are many questions such as who are exempted or who are not exempted for filing of Income Tax Return.  To resolve public queries, some common question answers (FAQs) are given below to clarify the issue :-

Exemption from Filling of Income Tax Return

Friends,  Now a days , many persons are waiting for Notification for exemption from filling of Income Tax Return.  Without notification nothing is clear like from which Financial Year exemption will be given, having interest income on Saving Bank Deposit will be treated  for exemption for filling of Income Tax Return etc. 

NO NEED TO FILE INCOME TAX RETURN

         Now CBDT has clearly notified that an individual  getting salary upto 5 Lakh after allowing all deductions from a single employer and getting interest income up to Rs. 10,000 from his Saving Bank Deposit account will be eligible to get exemption from filling of Income Tax Return from the Financial Year 2010-11 with some conditions like he will provide his PAN number to our employer and will  submit complete bank interest detail and also pay all amount of Income Tax in the shape of TDS deduction from salary and also receive form 16 from his employer.  There are some more conditions in which exemption for filling of Income Tax return will not be provided.  Therefore , all individuals are requested to read complete Notification which is given below  issued by CBDT before getting exemption for filling of Income Tax Return. 

No.402/92/2006-MC (14 of 2011) 

Government of India / Ministry of Finance 

Department of Revenue 

Central Board of Direct Taxes 

***

New Delhi, dated the 23rd June, 2011 

PRESS RELEASE 

The Central Board of Direct Taxes has notified the scheme exempting salaried  taxpayers with total income up to Rs.5 lakh from filing income tax return for assessment year  2011-12, which will be due on July 31, 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. Such  individuals must report their Permanent Account Number (PAN) and the entire income from  bank interest to their employer, pay the entire tax by way of deduction of tax at source, and  obtain a certificate of tax deduction in Form No.16.  

Persons receiving salary from more than one employer, having income from sources other than salary and interest income from a savings bank account, or having refund claims shall not be covered under the scheme. 

The scheme shall also not be applicable in cases wherein notices are issued for filing  the income tax return under section 142(1) or section 148 or section 153A or section 153C of  the Income Tax Act 1961.

xxxx

Notification 


NOTIFICATION NO. 36/2011 [F. NO. 142/09/2011 (TPL)]

DATED 23-6-2011

In exercise of the powers conferred by sub-section (1C) of section 139 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby exempts the following class of persons, subject to the conditions specified hereinafter, from the requirement of furnishing a return of income under sub-section (1) of section 139 for the assessment year 2011-12, namely :—

Class of Persons

1. An Individual whose total income for the relevant assessment year does not exceed five lakh rupees and consists of only income chargeable to income-tax under the following head,—
   (A)  “Salaries”;
   (B)  “Income from other sources”, by way of interest from a savings account in a bank, not exceeding ten thousand rupees.
   Conditions
2. The individual referred to in para 1,—
   (i)  has reported to his employer his Permanent Account Number (PAN);
   (ii)  has reported to his employer, the incomes mentioned in sub-para (B) of para 1 and the employer has deducted the tax thereon;
   (iii)  has received a certificate of tax deduction in Form 16 from his employer which mentions the PAN, details of income and the tax deducted at source and deposited to the credit of the Central Government;
   (iv)  has discharged his total tax liability for the assessment year through tax deduction at source and its deposit by the employer to the Central Government;
   (v)  has no claim of refund of taxes due to him for the income of the assessment year; and
   (vi)  has received salary from only one employer for the assessment year.
3. The exemption from the requirement of furnishing a return of income-tax shall not be available where a notice under section 142(1) or section 148 or section 153A or section 153C of the Income-tax Act has been issued for filing a return of income for the relevant assessment year.
4. This notification shall come into force from the date of its publication in the Official Gazette.

Last circular vide which e-filing was mandatory for those whose total income exceeds 10 lakh. 

MANDATORY e-FILING OF INCOME TAX RETURN

PRESS RELEASE [NO. 402/92/2006-MC (12 OF 2012)], DATED 2-7-2012

CBDT has issued notification S.O. 626(E), dated 28th March 2012 vide which e-Filing has been made compulsory for Assessment Year 2012-13 onwards for :

  •  an individual or a Hindu undivided family, if his or its total income, or the total income in respect of which he is or it is assessable under the Act during the previous year, exceeds ten lakh rupees; and

  •  an individual or a Hindu Undivided Family (HUF), being a resident, having assets (including financial interest in any entity) located outside India or signing authority in any account located outside India and required to furnish the return in Form ITR-2 or ITR-3 or ITR-4.

However, digital signature will not be mandatory for these taxpayers and they can also transmit the data in the return electronically and thereafter submit the verification of the return in Form ITR-V.

2. Filing of returns electronically under digital signatures is already mandatory for any company required to furnish the return in Form ITR-6 or a firm required to furnish the return in Form ITR-5 or an individual or HUF required to furnish the return in Form ITR-4 and to whom provisions of section 44AB are applicable.

3. The Income Tax Department has received a record number of 1.64 crore income tax returns electronically in the year 2011-12. E-filing is an easy, fast and secure method of filing of income tax return. The electronically filed returns are processed at the Centralized Processing Centre, Bengaluru. The processing for e-filed return is faster and taxpayers get their refunds, if due, quickly. The Department also provides some value added services like tracking of refunds, viewing tax credit status (Form 26AS), e-mail and SMS alerts regarding status of processing and refunds to taxpayers who e-file their returns.

(If you are not cover in above Exemption, You should file your Income Tax Return in Time,
to submit return yourself (click here))

Income Tax- Circular No. 8/2010 dated 13.12.2010

Friends,   Circular No. 8/2010 dated 13.12.2010 applicable w.e.f. Assessment Year 2011-12 is given below for clarity. 

Income Tax Circular No8Dated131210

NOTIFICATION NO. 36/2011 [F. NO. 142/09/2011 (TPL)] dated 23.06.2011

            In exercise of the powers conferred by sub-section (1C) of section 139 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby exempts the following class of persons, subject to the conditions specified hereinafter, from the requirement of furnishing a return of income under sub-section (1) of section 139 for the assessment year 2011-12, namely :—

Class of Persons

1. An Individual whose total income for the relevant assessment year does not exceed five lakh rupees and consists of only income chargeable to income-tax under the following head,—
   
   (A)  “Salaries”;
   (B)  “Income from other sources”, by way of interest from a savings account in a bank, not exceeding ten thousand rupees.

Conditions

1. The individual referred to in para 1,—
   
   (i)  has reported to his employer his Permanent Account Number (PAN);
   
   (ii)  has reported to his employer, the incomes mentioned in sub-para (B) of para 1 and the employer has deducted the tax thereon;
   
   (iii)  has received a certificate of tax deduction in Form 16 from his employer which mentions the PAN, details of income and the tax deducted at source and deposited  to the credit of the Central Government;
   
   (iv)  has discharged his total tax liability for the assessment year through tax deduction at source and its deposit by the employer to the Central Government;
   
   (v)  has no claim of refund of taxes due to him for the income of the assessment  year; and
   
   (vi)  has received salary from only one employer for the assessment year.
   
2. The exemption from the requirement of furnishing a return of income-tax shall not be available where a notice under section 142(1) or section 148 or section 153A or section 153C of the Income-tax Act has been issued for filing a return of income for the relevant assessment year. This notification shall come into force from the date of its publication in the Official Gazette.

Income Tax Planning of Financial Year 2011-12 or Assessment Year 2012-13

The financial year 2011-12 is coming to an end. It is time to finalise your income tax planning and savings. There are many sections under the Income Tax Actthat enable you to reduce your income tax liability.

These are some sections you need to tap:

Section 80C

This section allows income tax exemptions and rebate to individuals. You can invest in certain specified instruments and reduce your taxable income by up to Rs 1 lakh under this section.

These are some of the major instruments that attract income tax benefits. You can invest Rs 1 lakh in one or more of these instruments to avail tax rebate under Section 80C:

Provident funds (Employee Provident Fund and Public Provident Fund) Life insurance (term insurance and endowment plans) Pension plans Equity-linkedsavings schemes (ELSS) of mutual funds Specified government infrastructure bonds Repayment of housing loan (principal component) National Savings Certificate (NSC)

Section 80CCF:

This is an extension of Section 80C. The Income Tax Act allows you an additional rebate (in addition to the limit allowed under Section 80C) of up to Rs 20,000 when investing in notified infrastructure bonds. This section is a boost for infrastructure development in the country. There is an expectation that the investment limit in this section may be raised for the next year.

Home Loan Benefits:

A housing loan provides relief under the Income Tax Act. The repayment of the principal component of a housing loan attracts rebate under Section 80C of up to Rs 1 lakh. The interest payment on a housing loan attracts rebate of Rs 1.5 lakhs.

Medical Insurance:

The income tax benefit on purchase of medical insurance comes under Section 80D. You can claim a rebate in income tax on the premium paid to buy mediclaim policies. The maximum limit on the income tax rebate under this section is Rs 15,000. You can avail this deduction on medical insurance premiums paid for yourself, your spouse, parents and children.

Other Deductions (salaried individuals):

Medical allowance:

If an employer of a salaried individual offers a medical expense reimbursement allowance, an income tax deduction of up to Rs 15,000 per year against the relevant expenses is allowed.

LTA (Leave Travel Allowance):

If an employer offers a leave travel allowance (LTA) as a part of the salary, one can avail an income tax deduction on the travel expenses. According to the norm, the LTA benefit can be availed twice in a block of four calendar years. Presently, the block applicable is from 2010 to 2013.

Review tax planning

These are some points you should keep in mind while reviewing your investment planning with respect to income tax optimisation :

Check limits:

First of all, exhaust the quotas of Section 80C and Section 80CCF. You can analyse the various options and invest to save tax under Section 80C.

Use allowances:

Salaried tax-payers should plan expenditure under medical allowance, child education allowance and conveyance allowance for maximum benefit.

Insure:

Investing in a medical insurance policy is another option to save tax, if your Section 80C limit is already exhausted. However, it is not advisable to take a medical insurance policy just for the sake of saving tax.

Who Can Not Avail Benefit of Exemption of Filling of Income Tax Return.

No doubt that the Press Release has been issued by Central Board of Direct Taxes on 23rd June, 2011 regarding Exemption for Filling of Income Tax Return w.e.f. Financial Year 2010-11 or Assessment Year 2011-12.   Now it is important to know point wise  list of those Salaried persons who can not avail benefit of this exemption for filling of Income Tax Return which is given as under :-

• Income from Business, House Property, Capital Gain, Income from Other sources (other than interest Rs. 10000 from Saving Account).
• Having Salary Income greater than Rs. 5,00,000/- after allowing deductions like 80C,80D,80U etc.
• Having income other than Salary Head (except Rs. 10,000 as interest from Saving Bank Account)
• Service with Two or more Employer with in the Same Financial Year. 
• Interest income other than Saving Bank Account. Like FDR interest or Interest from Loan. 
• In case PAN number has not provided to his employer in time. 
• Income from interest from Saving Account has not reported his employer.
• Complete Income Tax has not been deducted as TDS. It means that Assessee has deposited Self Assessment Tax. 
• In case of Refund Cases.
• If  notice has been issued by Income Tax Department for filing of Income Tax Return u/s 142(1), 148, 153A or 153C.
• Employer has not issued Form 16 to his employee.