This can be better understood with the following example. For instance, if your gross total income is 2 lakh and you buy insurance worth 50, 000. You can claim deduction worth 50, 000 under Section 80C. Therefore, your taxable income will be 1.5 lakh. Ultimately the tax payable on 1,50,000 is Zero. Yet you need to file your Income Tax Return as your basic income exceeds the exemption limit of 1.8 lakh (NA for senior citizens).

Exemption Limit For Salaried Employees

The salaried professionals can opt for exemption from filing the Income Tax Return in case of the following situations:

• Under Section 80C, if your total income after deductions is 5 lakh, you can choose exemption from filing the Income Tax Return.
• Apart from salary, income only from Bank Interest, up to 10, 000 will be allowed. If an individual has other source of income such as House Property, Capital Gain, or even interest from fixed deposits, you will have to file your Income Tax Return.
• It is important that you declare your income from Saving Bank Interest to your employer too, as the employer will be calculating TDS considering the amount of your interest income.
• You have to file your tax return in case any refund is due.

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