The Central Board of Direct Taxes ('CBDT') has issued a notification which provides that an individual is not required to file a personal income tax return if his total income for the year does not exceed five lakh rupees and consists of only two types of incomes, namely salary from employment and income by way of interest from a saving bank account.

There are additional conditions to avail this benefit which are:

Interest earned from a savings bank account should not exceed Rs 10,000;

The individual has obtained a Permanent Account Number ('PAN') from the Income-tax authorities and has reported the same to his employer;

The individual has reported to his employer the interest income and the employer has deducted the tax thereon;

The individual has received a certificate to of tax deduction at source ('Form 16') 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;

The individual has discharged his total tax liability for the assessment year through tax deduction at source and its deposit by the employer to the Central Government;
The individual has received salary from a single employer throughout the financial year; and

The individual has not claimed a tax refund for the income of the relevant financial year.

A person cannot claim benefit of non filing of tax return under this notification where he is required to file the same by a notice issued by the tax authorities.
As this change has come a few days back, it has given ample time for employees to contact their employers and provide the necessary data and free themselves from filing the personal income-tax return. The notification is a welcome step as a large number of individuals will get exemption from the hassles of standing in a line to file their personal tax return.

Source: The Economic Times, India,  dated 21/02/2012