Non-filers and e-filers

T.C.A. RAMANUJAM | Updated on July 21, 2011


Filing I-T returns is worth the effort as it records compliance with the tax laws.

This is that time of the year when tension grips the salaried class of assesses. They have to file their returns of income. The Income-Tax department in Chennai makes elaborate arrangements to facilitate the filing of returns .

Long queues at the IT offices are sought to be avoided by the opening of special Return Receipt Counters. Sometimes, the stamping of the receipt can amount to a regular assessment itself. Tax law threatens non-filers with a discretionary penalty which can go up to Rs 5,000. The law insists on the filing of the return if one's taxable income exceeds the minimum taxable limit of Rs 3,00,000.

The Finance Minister announced at the time of the presentation of the Budget 2011 that certain classes of persons will be exempted from the compulsory obligation of filing the tax return. The Central Board of Direct Taxation has come up with the Notification laying down that persons with salary income not exceeding Rs 5 lakh along with interest on savings bank of Rs 10,000 need not file their return of income .

The salaried class has nothing to hide. There is no need to probe the return filed by the ordinary employee. The employee has to inform the employer that he is getting interest from savings bank. If he gets interest on fixed deposit or from tax saving bonds such as NSC, the Notification will not apply and he will have to file the return of income. Probably the Board wanted to test the waters with the limited application of the provision for exemption from filing returns of income. The Notification will not apply if the employee has property income or income by way of capital gains. The Board expects tax to be deducted at source on the interest income also. The ultimate condition is that the income should be only from one employer. Tax relief by way of donations to eligible charitable trusts cannot be claimed.

The Notification is a good beginning. It will help such of those salaried assesses who have no refund claims and whose taxes are taken care of by TDS. There is need for expanding the scope of this Notification. The exemption limit can be raised up to Rs 10 lakh easily.


The Finance Minister has assured the taxpayers that Department will promote electronic filing of tax returns. The promise has been more than amply fulfilled. Web sites are in operation. The relevant return forms can be filled up through the tax filing portal. The details contained in Form 16 should be fed into the relevant form given by the Web site. The Centralised Processing Centre at Bangalore will take care of the electronic return. There are also facilities for digital signature. Without visiting the I-T office, one can discharge one's tax obligation through the facility known as ‘E-file by Email'.

Most salaried cases require the use of Form No. ITR - 2. Of course, one can always ring up the Public Relations Officer in the I-T offices to seek his advice about the particular form to be used and the mode of filing of return.

One good thing the Department has achieved is the spread of knowledge about obtaining PAN. It is easy and you can get the PAN within 15 days. It will help you in so many financial transactions. It will also help you to get Know Your Customer done through the bank. Such KYC compliance is obligatory even for mutual fund transactions.

Is the exemption from compulsory filing of the tax return a boon to the taxpayer?

Any discerning taxpayer will always like to have his return processed and the record set in the I-T Office about his financial transactions. Return filing may be an arduous task. But the trouble is worth it. One can have the satisfaction of having complied with the tax law and established a record of compliance with the I-T department. As between non-filing of the return and the actual filing of the return, the choice should always be in favour of filing the tax return carefully, truthfully and honestly.

(The author is a former Chief Commissioner of Income-Tax.)

Published on July 16, 2011

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