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Filing returns through employer — New norms prescribed for salaried employees

K.R. Srivats

New Delhi, Jan. 14

A SALARIED employee who has worked for more than one employer during the `previous year' cannot opt for the Income Tax department's new scheme that allows him to file his tax return through the employer.

The scheme, which will come into effect from April 1, 2004, has been formulated as part of the "mini-budget" measures that were announced recently by the Finance Ministry.

The scheme provides an additional mode of furnishing I-T returns for persons deriving income from salaries. It allows an employee, on his option, to furnish his return through the employer.

"The condition of a single employer is a conscious decision to avoid confusion for the employer who has to submit return on behalf of the employee. Even in the bulk filing scheme, we had stipulated the single employer norm," a revenue department official said.

The tax department has also stipulated that it would not accept under this scheme the I-T return of an employee who is not in receipt of his salary from the employer as on the last day of the `previous year' for which the return is being furnished.

The income-tax department has now specified the format of Form 16AA, which would now be a certificate for tax deducted at source from income chargeable under the head `Salaries'-- cum -- Return of income. It is this Form 16AA that would be filed by an employer with the IT assessing officer after due verification and signing of the return by the employee.

Employees who can opt for the scheme are those whose income from salaries, before deduction under Section 16 of the Income Tax Act, does not exceed Rs 1.5 lakh in a `previous year'.

Further, the total income of an employee should not include income chargeable to income tax under the head `profits and gains of business or profession' or `capital gains' or `agricultural income.'

An employee would not be eligible to opt for the scheme if he is in receipt of any other income from which any person other than the employer has deducted tax at source during the previous year.

In tune with the Income Tax department's resolve to widen the base of Permanent Account Number (PAN) allottees, the new scheme also provides that a return of income without PAN or with an incorrect PAN of the employee would not be accepted under the scheme.

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