The recent announcement made by the Income Tax department says that people who have an income of up to or less than Rs 5 lakhs need not file ITR which has brought in some mixed reactions. One question which has been the talk of the town is that this requirement has been made only for salaried people, but what about pensioners and senior citizens.
Salaried people whose income is less than Rs 5 lakhs annually will have to disclose their earning from all sources such as dividend and interest received. For such people form 16 issued will be regarded as the income tax return and they do not have to fill it separately. This has reduced lots of paper work for both the Income Tax department as well as the salaried class individual whose income is less than Rs 5 lakhs.
This may prove to be beneficial in order to find out the actual number of people whose salary is genuinely less than Rs 5 lakhs. In India quite a few people lie in this slab, however, they have income from other sources as well. This scheme will be valid from the financial year 2011-12 therefore people under Rs 5 lakhs regime will benefit from this new development and will get the advantage of financial year 2010-11 in 2011-2012.
This step would help in reducing red tapism since the work burden would reduce. Another thing which can be added to this is that the employer can directly submit form 16 to the IT department instead of forwarding it to the employee and the employee handing over to the IT department. This way there would be no submission of false information and the work would also reduce. This would make the system more fowl proof and easy to handle for both the salaried class as well as the IT department.
These small thing help in making the system more smother and reduces clerical work and makes the work flow in an easier manner. Government must continue to bring such things into regular practice to make process and procedures easier and simpler.