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TDS may save you from filing returns

TDS may save you from filing returns
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First Published: Mon, Feb 28 2011. 09 26 PM IST

Updated: Mon, Feb 28 2011. 09 26 PM IST
The government may soon exempt some salaried taxpayers from filing income-tax returns if they do not have any other source of income besides their salary and the employer has already deducted the tax before payment of wages.
The government “shall soon notify a category of salaried taxpayers who will not be required to file a return of income, as their tax liability has been discharged by their employer through deduction at source”, finance minister Pranab Mukherjee said in his annual budget speech for the year starting 1 April. “My priorities are directed towards making taxes moderate, payments simple for the taxpayer and collection of taxes easy for the tax collector.”
The new policy is aimed at reducing paperwork for salaried people who do not have any other income besides their salary and are subject to tax deduction at source (TDS). Experts expect few to benefit as a salaried person with even a basic savings account may be excluded from the category.
Other income may include interest earned on a savings account, or a fixed deposit with a bank and capital gains made from sale of property or stock, among other items.
“This is like the old system, where filing of income-tax returns by the salaried class was not required if the employer had already cut TDS,” said Rajesh Srinivasan, senior director at Deloitte India. “This is a good relief from the hassle of paperwork for many who will fall in this category. Today, how many will fall in this category is hard to tell,” he said.
The Central Board of Direct Taxes will soon issue a notification exempting certain classes of salaried taxpayers from furnishing a return. The details of the notification aren’t available.
Currently, every person whose earnings exceed the taxable limit has to file an income-tax return.
People who may benefit from this move may include those who fall in the lower-income bracket.
Millions of Indian taxpayers may have to wait for the details before they will know how this proposal will affect them.
bindisha.s@livemint.com
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First Published: Mon, Feb 28 2011. 09 26 PM IST