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.