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Thursday, June 9, 2011

News


Income below Rs 5 lakh? You need not file returns

The government has exempt salaried people earning up to Rs 500,000 annually from filing income tax returns.
A move that will bring relief to about 80 lakh people was announced by the Finance Minister Pranab Mukherjee  when he presented the Budget in February.

On Tuesday, Pranab Mukherjee said this will be applicable in the 2011-12 assessment year for the income earned in 2010-11. He said that a notice to this effect will be brought out soon.

This move will reduce the compliance burden on small taxpayers. In case such a salary earner has income from other sources like dividend, interest etc. and does not want to file returns, he will have to disclose such income to his employer for tax deduction.
The Form 16 issued to salaried employees will be treated as Income Tax Return, he added.

Asking the Central Board of Direct Taxes to be vigilant in suspected money laundering cases, Mukherjee cautioned that terror activities and other crimes are being funded by anti-national elements through illegal transfers. 
Mukherjee disclosed that to check these transfers, government has approved setting up of Directorate of Criminal Investigation in Income Tax Department itself. 
The Directorate will track the criminal activities before, during and after the crime is committed. 
Expressing his keenness on fiscal consolidation, Mukherjee stressed that fiscal deficit has to be reduced drastically to achieve the goal.

File e-returns, get income-tax refunds in a month


To speed up refunds and encourage electronic filing of tax returns, the Central Board of Direct Taxes has promised expeditious refunds.

As on December 31, 2010, there were about 40 lakh refund cases pending with the tax department. Last year, a Comptroller and Auditor General report had highlighted that it takes as much as 10 months for a taxpayer to get his refund.

"The whole idea is that small taxpayers should not face any hardship in his interface with the department," Chandra added. Though the e-filing of tax returns is rising in absolute terms every year, its level has stagnated at about a quater of the total retuns filed.

"E-filing ensures that tax payers' information on income, taxes and refunds are uploaded in the tax system instantly and tax computations are processed on a real-time basis," said Vikas Vasal, executive director, KPMG.

"A refund banker scheme is already in place in the whole of country to ensure that taxpayers get refunds well in time," said an income-tax department official.

"We issued the highest-ever refunds in 2010-11," says Chandra, who had instructed his officials to clear all pending refunds before March 31.

This will also help the department begin with a clean slate when the new direct tax code comes into effect from the next financial year.

Such tax-payers will not be required to file return even if they have small interest income. "Any step to help tax-payers would help increase compliance levels," he said.

E-filing, which was formally launched on October 13, 2006, is mandatory for companies but remains optional for individuals.

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