The Finance Minister has made a significant announcement.

A category of salaried taxpayers whose tax liability has been discharged by their employer through tax deduction at source will not be required to file any return of income. Of the 3,13,84,084 individuals shown as effective assessees, a bulk should relate to salaried cases.

It stands to reason that they need not be forced to stand in long queues in July in the Income Tax department to file a tax return which yields no Revenue.

The announcement will bring cheer to thousands of salaried taxpayers.

The enhancement in exemption limit will add to this joy. It will relieve the tax department of unwanted work load. The work load has been going up from year to year. See the following chart:

The Department is barely able to dispose of 50 per cent of the work load (5,21,58,000 assessments] to be disposed of in 2009-10.

Section 139 C introduced by Finance Bill 2011 refers only to any class of cases, and not merely to the salaried class in this connection.

The Finance Minister has restricted the section to a category of salaried taxpayers to be notified by the Board for this purpose.

Already, the Board had issued a notification early in February, 2011 proposing an increased number of IRS Officers to be deployed to probe and gather intelligence on cases involving black money.

They will now concentrate on cases involving incomes of over Rs 30 lakh and focus their efforts on specialised areas such as international taxation, intelligence in criminal prosecution etc.

These Rules will come into force from April 1, 2011.

On the one hand, a large bulk of salaried taxpayers will be released from the legal obligation to file tax returns. On the other, work load on the IRS Officials will get reduced. It will certainly enhance productivity of resources employed in raising Revenues.

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

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