Starting this financial year, salaried employees earning up to Rs. 5 lakh a year no longer need to file income tax returns, the Finance Ministry said today.

The exemption from filing I-T returns is applicable only if 'the total income of the employee does not exceed Rs. 5 lakh ... (and) the annual interest earned from savings bank account is less than Rs. 10,000' for assessment year 2012-13.

Filing I-T returns is, however, necessary to claim refunds.

There are about 85 lakh salaried persons in the country whose yearly income, including earnings from other sources like bank deposits, does not exceed Rs. 5 lakh.

The exemption will be permitted only if the assessee has received a certificate of tax deduction in Form 16 from the employer. The employees have to report income from interest on savings bank account to the employer to become eligible for exemptions.

Earlier, it was obligatory for all salaried persons to file income tax returns under the Income Tax Act, 1961.

Meanwhile, the tax department said special counters will be set up in Delhi and 'Tax Kiosks' in various parts of Mumbai to assist people in filing income tax returns.

Unlike the previous years, the tax department will not set up any return receipt counters are at Pragati Maidan in New Delhi.

"Instead returns will be received at Civic Centre, opposite Ramlila Ground, New Delhi, from July 26 to 31.

The Mumbai Income Tax Department will set up 'Tax Kiosks, manned by Tax Return Preparers, at various locations in city to assist individual and HUF taxpayers in preparation and filing of the returns. A tax payer will have to pay Rs. 250 to avail services of TRPs.

'Tax Kiosks' will be functional in certain residential areas on July 22 and in certain offices on July 24 and 25.

At present, income of Rs. 2-5 lakh attracts 10 per cent tax, Rs. 5-10 lakh 20 per cent and above Rs. 10 lakh, 30 per cent.