The Indian government has issued a notification (No.402/2006-MC 14 of 2011) on 23rd June, 2011 according to which, the tax payers whose annual income comprising salary and interest is up to Rs 5 lakh, shall be exempted from filing income-tax return for Assessment Year 2011-12 (Financial Year 2010-11).
Individuals having total income up to Rs.5,00,000 for FY 2010-11, after allowable deductions, consisting of salary from a single employer and interest income from deposits in a saving bank account up to Rs.10,000 are not required to file their income tax return. Such individuals must report their Permanent Account Number (PAN) and the entire income from bank interest to their employer, pay the entire tax by way of deduction of tax at source, and obtain a certificate of tax deduction in Form No.16.
However, filling of IT Return is a must if employee:
1) receives salary from more than one employer,
2) has salary income with a refund claim for TDS
3) also has income from business or profession,
4) also has income from House Property,
5) also has income from Capital gains,
6) also has income from other sources (other than interest income from a savings bank account up to Rs.10,000).
This is a good move as 85 lakh employees can be freed from the drudgery of filing returns. Form 16 shall be considered a better representation of income, henceforth. For home loans and visas, the authorities might ask for Form 16 and not tax returns. So, preserve your Form 16.