E-filing may be must for people with annual income above Rs 5 lakh

Taxpayers having an annual income of over Rs 5 lakh will be required to file their returns in electronic form, a senior Finance Ministry official said on Tuesday. Besides, the Finance Ministry is also making provisions for e-filing of Wealth Tax returns.

Income tax returns for the group above Rs 5 lakh, all such returns will be e-filed. This is a move towards using technology so that the interface between Assessing Officer and assessee is minimised, Revenue Secretary Sumit Bose said at a Ficci event here.

The government had last year introduced the system of e-filing of Income tax returns for assessees with annual income of Rs 10 lakh and above.

Section 14 of the Wealth-tax Act provides for furnishing of return of net wealth as on the valuation date in the prescribed form.

At present, certain documents and reports are required to be furnished along with the return of net wealth under the provisions of Wealth-tax Act read with the provisions of Wealth-tax Rules.

Sections 139C and 139D of the IT Act contain provisions for facilitating filing of return of income in electronic form by certain class of income-tax assessees.

In order to facilitate electronic filing of annexure, less return of net wealth, it is proposed to insert new sections 14A and 14B in the Wealth-tax Act on similar lines. The amendments will take effect from June 1, 2013,said the Memorandum to the Finance Bill 2013.



CIT, CPC (TDS) will be subordinate to DGIT (System)

  MINISTRY OF FINANCE (Department of Revenue),

 (Central Board of Direct Taxes), NOTIFICATION No. 15/2013,

 Income-Tax, New Delhi, the 26th February, 2013

 S.O. 460(E).-In exercise of the powers conferred by Section 118 of the Income-taxAct,1961(43 of 1961), the Central Board of Direct Taxes hereby directs that the income-tax authority specified in column (3) of the Schedule below shall be subordinate to the income-tax authority specified in column (2) of the said Schedule.


S. No. Designation of Income Tax Authorities Designation of Income Tax Authorities
1. Director General of Income Tax (System) Commissioner of Income Tax Centralised Processing Cell (TDS)

This notification shall come into force from the date of its publication in the Official Gazette.


Ten Tax Saving Options for Salaried Employees

1. Leave allowance: An employee can use such an allowance to cover his domestic travel and can be used for air, rail, and road transport.

2.Gratuity paid to an employee also has taxation benefits. To determine the taxability of gratuity, it is important to understand whether an employee is covered by payment of gratuity act. If an employee is covered by this act, lower of the following will be exempted from tax: –

  • 15 days salary based on salary drawn for each year of service.
  • Rs. 10,00,000/-
  • Actual gratuity received.

If an employee is not covered under the gratuity act then, the lower of the following will be exempted from tax:-

  • ½ month salary for each completed year of service.
  • Rs. 10,00,000/-
  • Actual gratuity received.

3.New pension scheme (NPS) : In this scheme an employer contributes an amount to the NPS which is the same amount that is contributed by the employee. Both of these contributions are eligible for deduction u/s 80 CCD (2) of the act. Thus such contributions reduce the overall tax liability of the employee.

4.House rent allowance (HRA) is paid by an employer to an employee to pay any rental towards his house property. An exemption is available under such HRA. The exemption is based on the least of the following: –

  • An amount equal to 50% of the yearly salary received (applicable to major Indian metros and 40% in other cases)
  • Actual HRA received
  • Rent paid in excess of 10% of the salary received in a year

5. Travelling allowance: Such an allowance is paid by the employer to the employee to meet his cost of travel on tour or on transfer from his work. This allowance can be completely exempt if the employee utilizes an amount equal to or more than the allowance.

6. Another option that is available to the employee is transport allowance. Such allowance is exempt up to Rs. 800/- per month i.e. 9600/- per year as a maximum deduction is available against this allowance.

7. In case a salaried employee has children, he should ask his employer to pay him children education allowance. A deduction of Rs. 100/- per month per child up to a maximum of two children is available.

8. An employee is entitled to receive perquisites  from his employer. The tax on such perquisites is generally borne by the employer and is tax exempt for the employee. Perquisites include payments by the employer to the employee such as car conveyance, free food and beverages, interest free or concessional  loan, sweeper/gardener/cook allowance, leave travel concession etc. These options are generally available as a part of salary structuring which an employee can provide to his employer.

9. Other general deductions u/s 80 C is also available to the salaried employee. Under this section, he can make investments in approved FD, Equity oriented MF, PPF etc. He can also pay his life insurance premiums. The total benefit available under this section if Rs. 100000/-.

10. An employee can also make several donations u/s 80 G and use that to reduce his total income. Such donations offer either 100% deduction or 50% deduction depending on the institution to which the donation is made.


Handling of PPF deduction u/s 80C

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Suppose a Cheque is deposited in PPF on 29th March 2013 and it got cleared on 1st April 2013 then according to the Govt. Tax Deposit Rule, where if the tax is deposited within the due date by cheque but it got cleared after the due date then the cheque’s tender date will be taken as the deposit / receipt date. This means then the tax will be deducted in the financial year 2012-13 under section 80C.