In my previous article I have explained about How to use ITR -1 form? and also I have added brief explanation on the new announcement from the finance minister that there is no ITR filing is required for the income group less than Rs. 5 lacs. In this article, I would explain that in more details and there are many other things to be considered while calculating the total income and criteria to not filing the tax returns. If you have any doubts, post it in the comments section.
How to calculate the total Income?
Here the rule says that, those who are getting the total taxable income less than Rs. 5 lacs need not submit the income tax returns. You need to calculate the total taxable income by deducting all your tax exempt investments. This would include the following things:
- Investments under section 80C (PPF, Life Insurance premium, home loans principal, PF, NSC, Tax saving fixed deposits, etc)
- Home Loans interest payment under section 24B
- Medical insurance premium under section 80D
- HRA exemptions under section 13A
- Education loan exempt on section 80E
All the deduction must be deducted from the total income. Looking into the deductions, if the total income is above Rs.8 lacs also good come under this category. But, there are some other restrictions which needs to be considered. Please read the following sections.
Who has to submit the IT Returns?
If your taxable income is less than Rs. 5 lacs and fall into any of the following category, then you must file the ITR.
- If you have applied for the tax refund from previous year.
- If you have not received the form 16 from your employer.
- If you have worked for more than one employer in that financial year (FY).
- If you have not submitted your banks savings account interest income to the company for the tax deduction. if the income is above Rs. 10000, then you must file the IT returns.
- If you have any capital gains from sale of mutual funds, shares, etc. Even if you need not pay any tax also you have to file the IT returns.
But, the general opinion on the public is that this announcement is not much useful to the many. Because, most of the people would fall into any one of the above category.
Apart for that, submitting the savings bank interest rates to employer is extra work since company also has to calculate the tax for the interest income.
What is the process?
In the above sections I have explained who need not file the IT returns. The following is the process which needs to be followed if you are not submitting the ITR:
- Calculate the interest income from all your bank savings account. Note that it should be below Rs.10000
- Give the details of your interest income to the employer.
- Employer will deduct the TDS on your bank savings account income and pay to the government. This details will be added into the form 16.
- Employee must provide the PAN details to employer.
- Since you are not filing the ITR, it is required to get the Form 16 from employer for the future purpose. It is necessary for you to apply home loans from the banks.
I hope this article would provide good idea on who really need not file the IT returns. If you are in doubt, please clarify here or your friends whether you have to submit the returns. Please post your thoughts in the comments section.