Exemption from filing of income tax return-Is it an eyewash?

You may already know the fact that Income tax department announced a scheme, wherein taxpayers are exempted from filing returns whose total  income is up to Rs.5,00,000. But it consists lot of conditions which are impractical for taxpayers to avail this benefit. Let us look at it’s features and how this scheme is just an eyewash.

1) As told above total income must be upto Rs.5,00,000 (after getting deductions from Sections 80C to 80U). Looks good when we see above statement. But in reality it consists of so many conditions which will be discussed below.

2) Income must be from salary and interest income from savings bank account wherein such interest income does not exceed Rs.10,000. Means if your income consists of returns from Bank FDs, RD, Mutual Funds or any other means of income ( like Income from House Property, Income from Business and Profession, Income from Capital Gain or other than Bank Interest income in case of Income from Other Source) then you are not eligible for this scheme.

3) If taxpayer is claiming any refund then he is not eligible under this scheme. So looking for refund means file the income tax return.

4) Reporting taxpayers PAN to his employer is mandatory. This I think mandatory thing which your employer asks. Hence not a major differentiating thing.

5) A salaried taxpayer who has earned income from more than one employer during the financial year is not covered under this scheme. So to avail this facility work with one employer for the whole Financial Year, job changed means not eligible 🙂

6)  You need to declare your interest income of savings bank account to your employer and  your employer deducted tax at source. So if you not declared your interest income to your employer and TDS not done from your employer means you are not eligible.

7) If you have any “loss from house property” and even if you declared the same to your employer for adjusting your salary income, you are not eligible under this scheme.

8) If you made any donations to charitable, social or philanthropic purpose other than Prime Minister’s Relief Fund, the Chief Minister’s Relief Fund or the Lt. Governor’s Relief Fund and availed deductions under Section 80G, then you are not eligible for this scheme.

9) If you are salaried taxpayer and having agriculture income of more than Rs.5,000 means you are not eligible under this scheme.

10) Taxpayers has received Form 16 from the employer, which mentions PAN, Income detail Tax deducted and deposited details, are only eligible.

After going through the above said so many conditions, it is impractical for any taxpayer to avail this scheme. It started with good move of reducing filing for taxpayers and reducing income tax department work but late notifications and with so many pre-conditions, it looks like it is just an eyewash.