Income Tax Returns Filing is an important task for all individuals in India. The procedure seems to be complicated for those who are unaware about such financial terms and procedures seek assistance from Chartered Accountant to get the filing work done. Income Tax Return forms refers to forms in which the taxpayers file information about their income earned and calculate tax applicable on the income and pay it to income tax department.
The Income Tax Act, 1961 mandates every Indian taxpayers to furnish details of their income earned through ITR Forms. These forms are known as Income Tax Returns or ITRs. This form pertains to a financial year which commences from 1st April and ends on 31st March of the subsequent year.
There are 7 types of ITR forms
FORMS | CATEGORIES |
ITR 1 | Individuals residing in India with a total income of up to Rs 50 lakh are eligible. ITR-1 may be filed by someone who earns money as salary, a home, or other outlets. An NRI is unable to file an ITR-1. ITRs may be filed using Form 16 by salaried taxpayers |
ITR 2 | Individuals and HUF for revenue from sources other than their enterprise or occupation. Individuals and NRIs who earn money from a job, a home, capital gains, or other sources may file Form ITR-2. ITR-2 may be filed by salaried people who have made profits or damages from stock purchases and sales. |
ITR 3 | Individuals are required to disclose their earnings from a company or occupation.Salaried people who earn money from the intraday stock exchange or futures and options trading should file Form ITR-3. Individuals may use ITR-3 to record revenue from jobs, real estate, capital gains, company or trade (including presumptive income), and other sources. |
ITR 4 | Individuals, HUFs, and partnership companies are subject to a presumptive taxation system on their earnings.ITR-4 is used to report revenue from a company with a turnover of up to Rs 2 crore that is subject to section 44AD taxation. In addition, ITR-4 is for revenue from an occupation with a turnover of up to Rs 50 lakh that is subject to section 44ADA taxation. ITR-4 may be filed by a freelancer who works in a notified occupation. |
ITR 5 | LLP, AOP, and BOI are both acronyms for alliance companies.LLPs, partnership companies, AOPs, and BOIs will file ITR-5s to disclose profits from their businesses and professions, as well as some other sources of income. |
ITR 6 | It is an income tax return form used by businesses to report revenue from industry or occupation, as well as all other forms of income. |
ITR 7 | It is the federal tax return for businesses, partnerships, and trusts that continue to be excluded from paying income tax. |
In this article we will discuss how a salaried person can file income tax returns. So let us first understand what is Income from Salary?
What is Income from Salary?
Salary refers to the money received by a person who is an employee of an organisation for the specific services offered by him/her. Salary is paid by the employer of an organisation.
What is Income Tax on Salary
Individuals need to pay tax on the income earned to the Government of India as per Income Tax Act, 1961. This tax is collected for running the entire country. It is through the taxes, government gets income and they run the nation. There are many taxes in our country. Among all the taxes, income tax is considered to be most important tax in India. The amount of tax to be paid will depend on the slab rate. To reduce taxable income, deduction and exemptions are provided by the Government upon making investments under certain schemes.
TAX SLAB AS PER OLD AND NEW TAX REGIME
So How to File Online Income Tax Returns for Salaried Persons?
Step 1: -
Open the e-filing portal of the Income Tax Department
Step 2: -
Log in to the portal by submitting your user ID (PAN), password and a CAPTCHA code. If you are not registered then sign up using PAN (Permanent Account Number)
Step 3: -
Under the E-file section click on “Income Tax Return” from the drop down menu and select the relevant assessment year.
Step 4: -
Now select the appropriate Income Tax Return(ITR) Form and download it. Salaried employees need to select from three forms i.e. ITR1, ITR2, ITR3.
Step 5: -
Select the file type as Original if you are not filing a revised return. Choose the submission mode of ‘Prepare and Submit Online’ and Click on ‘continue’
Step 6: -
Now fill the ITR form with all the necessary details related to your income, deductions, exemptions and investment. Then you are required to add the details of tax payments through TDS, TCS and advance tax. Click on Save Draft option periodically to avoid losing data.
Step 7: -
Compute the tax payable and pay tax. Then enter the challan details in tax returns
Step 8: -
Confirm the details entered in the form. Then select ‘Submit’.
Step 9: -
A message flashes on the screen prompting e-fling successful. Then acknowledgement form is generated. Then you must verify the return through one of the following methods
Aadhar OTP
Bank Account Number
Demat Account Number
Registered Mobile Number
Net Banking
Bank ATM
Sending Physical copy of the acknowledgement to the Centralised Processing Centre in Bengaluru.
Documents Required for Filing ITR of a Salaried Person
- Identity Proof (Pan Card)
- Address Proof (Aadhar Card)
- Bank Statement/ Passbook
- Form 16 (Certificate that contains all details about the salary paid to the employee by the employer)
- Salary Slips
- Form 26AS
- Form 16A (TDS Certificate applicable for ‘Income other than Salary’)
- Capital Gains Statements
Income Tax Allowances and Income Tax Deductions for Salaried Employees
Income Tax Allowances | Income Tax Deductions |
1. Standard Deduction Standard deduction is a flat deduction of INR 50,000 (for FY 2022-23) from the total income of salaried individuals. This deduction was introduced in Budget 2018 and is available to all salaried individuals irrespective of their actual expenses. | a. Section 80C Section 80C is one of the most commonly used tax-saving options for individuals. Under this section, you can claim a deduction of up to INR 1.5 lakh by investing in various instruments such as Public Provident Fund (PPF), Equity Linked Savings Scheme (ELSS), National Pension Scheme (NPS), etc |
2. House Rent Allowance HRA is an allowance received by employees from their employer to pay for their rented accommodation. HRA is partially or fully exempt from tax, subject to certain conditions. | b. Section 80D Section 80D allows you to claim a deduction for the premium paid towards health insurance policies for yourself, spouse, and dependent children. The deduction limit is INR 25,000 for individuals below 60 years and INR 50,000 for senior citizens. |
3. Leave Travel Allowance LTA is an allowance received by employees to meet their travel expenses while on leave from work. LTA can be claimed twice in a block of four years, and the exemption is limited to the actual expenses incurred on travel. | c. Section 80E Section 80E allows you to claim a deduction for the interest paid on an education loan for higher studies. There is no upper limit on the amount that can be claimed as a deduction, and the deduction is available for a maximum of eight years. |
4. Children Education Allowance Children Education Allowance is an allowance received by employees for the education of their children. The exemption limit for this allowance is INR 100 per month per child, up to a maximum of two children. | d. Section 80TTA Section 80TTA allows you to claim a deduction of up to INR 10,000 on the interest earned on savings bank accounts. This deduction is available to individuals and HUFs. |
5. Medical Expenses Medical reimbursement is an allowance received by employees to meet their medical expenses. The exemption limit for this allowance is INR 15,000 per annum | e. Section 80G Section 80G allows you to claim a deduction for donations made to charitable institutions. The deduction limit varies from 50% to 100% of the donation amount, depending on the type of institution. |
Why Salaried Employees Should File Income Tax Returns
Filing of Income Tax Returns helps the Individuals for :
- Adjusting capital gains or losses
- Claim Tax Refunds
- It helps for applying loans
- Helps for processing VISA
Due Dates for Filing Income Tax Returns
The due dates of Filing Income Tax Returns for individual tax payers is 31st July in the subsequent financial year. For example the due date for ITR of FY 2022-23 is July 31st, 2023.
Due Date to File an Income Tax Return | Penalty Applicable to Taxpayers with Less Than ₹5 lakhs of Total Income | Penalty Applicable to Taxpayers with Over ₹5 lakhs of Total Income |
On or before July 31st | A late fee is not applicable in this case. | A late fee is not applicable in this case. |
From August 1 to December 31 | ₹1,000 | ₹5,000 |
From January 1 to March 31 | ₹1,000 | ₹10,000 |
Conclusion
Salaried individuals are the ones who shell out actual money for taxes from their income and thus they are ones who are keen to know about the tax saving options. All taxpayers must be aware about the various tax saving options and tax slab. It would help the employees to avoid complications during tax planning.
