Big relief to the salaried individual has been provided by the government again for the coming Assessment Year (AY) 2012-13. Like the relief provided in AY 2011-12, in AY 2012-13 also salaried individuals whose total income for the relevant assessment year does not exceed 5 lakh rupees will be exempt to file return of income.

Central Government has made it official by issuing notification [NOTIFICATION NO. 9/2012 [F. No.225/283/2011-ITA(II)], dated 17-2-2012] on 17^th Feb, 2012.

We have noticed that there is wide confusion over the 5 Lac exemption, so we are providing here all the details regarding this exemption:

Assessee entitled for exemption

Individual whose total income for the relevant assessment year does not exceed five lakh rupees or say income after deduction is less than Rs. 5 lakh.

Total Income should include only

Total income should consists of only income chargeable to income-tax under the following head,-

• “Salaries”;
• “Income from other sources”, by way of Saving Bank Account Interest, is less than Rs. 10,000/-.

Exemption applicable only if the following Conditions are satisfied:

The above stated individual,-

• has reported to his employer his Permanent Account Number (PAN);
• has reported to his employer, the above stated incomes and the employer has deducted the tax (TDS) thereon;
• has received a certificate of tax deduction in Form 16 (i.e., Salary Certificate) from his employer which mentions the PAN, details of income and the tax deducted at source and deposited to the credit of the Central Government;
• has discharged his total tax liability for the assessment year through TDS and its deposit by the employer to the Central Government;
• has no claim of refund of taxes due to him for the income of the assessment year, and
• has received salary from only one employer for the assessment year.

 Few cases when this exemption will not be available even if total income is less than Rs. 5 lakh

• Where a notice under section 142(1) or 148 or 153A or 153C of the Income Tax Act has been issued for filing a return of income for the relevant assessment year.
• Where the assessee has claim or is entitled for refund for the relevant assessment year;
• Where the individual has worked under more than one employer and received salary from both the employers for the relevant assessment year.

How Notification issued on June, 2011 & Feb, 2012 differs

Both the notification issued differs only in respect of assessment years to which it is applicable. Notification issued on June 2011 was effective only for AY 2011-12 and now the recent notification issued on Feb, 2012 is effective only for AY 2012-13.

Hence, other than the assessment year, no changes have been made by the government relating to the exemption of non-filing of return.

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