Clarification for term Total Income for exemption from filing Income Tax Return

In a press release in Press Information Bureau, citing its Notification No: 9/2012 dated 17.02.2012, Ministry finance has explained about the exemption it has granted for Salaried Employees for filing Income Tax Returns for the year 2012-13.

The Exemption will be applicable to Salaried Employees who have earned only salary income and interest income from savings bank. Further following conditions should be satisfied to get the exemption from filing ITR.

The interest income from Savings Bank should be less than Rs.10,000/-

The total income (including interest income from Savings Bank) should not exceed Rs.5 lakh.

Explanation:

• SALARY INCOME INCLUDES :- PAY, DP, Band pay, Grade pay, DA, OTA, BONUS, CCA, Honorarium, Children Education Allowance Received, Pension, Subsistence Allowance, Government’s Contribution in New Pension Scheme, Transport Allowance above Rs.800/- per month.

• House Rent Allowance to the extent not exempted under Section 10 (13A) of Income Tax Act.

The total income is nothing but Salary Income plus Interest Income less all deductions under Chapter VIA of Income tax Act. The deductions under Chapter VI A are all deductions under Section 80C, CCC, CCD, 80 CCD(2), 80D, 80 DD, 80 DDB, 80 E, and 80 GG. To know more about the eligibility for deductions under these sections, click the following link.

No exemption if taxable income is restricted to Rs.5 lakh only because of Loss on House property:

Further, if an employee claims loss from House property under Section 24 of Income Tax Act(which would arise if he has paid interest for housing loan but has no income from the house property), for the purpose of claiming exemption from Income tax return, his Total income after all deductions under Chapter VI A should not exceed Rs.5 lakh, without taking into account the loss from house property. So, if the taxable income of an employee is less than Rs.5 lakh only after deduction of loss from house property under Section 24 of the Income Tax Act, he/she may not be eligible for the exemption from filing ITR. Though this aspect has not been discussed in the Notification No: 9/2012, Income Tax Department has published a detailed FAQ (Frequently Asked Questions) in which detailed explanation has been given in respect of this aspect.

The other conditions applicable the claiming exemption from filing ITR are:

1. Declaration of PAN to employer.

2. Deduction of Income Tax properly by
Employer after report of income by employee.

3. Issue of Form 16 and payment of Tax deducted from employee in to Government Account

4. No refund involved

5. Income from only one employer.