Salaried ITR
Salaried ITR refers to Income Tax Return filings by individuals who earn income primarily through employment. It includes reporting salary details, deductions, and other sources of income for tax assessment.
Who is a salaried employee for e-filing of ITR?
A salaried employee, for income tax purposes, is a person who receives a fixed amount of income from an employer for inducing services under a contract of employment. The income may include salary, allowances, perquisites, and other benefits. The salaried employee is liable to pay income tax on the income earned from such employment after deducting the eligible deductions and exemptions under the Income Tax Act 1961. The salaried employee has to file an income tax return every year, reporting the details of income, deductions, taxes paid, and refund claimed, if any.
What are the Basic Exemption Limits for FY 2024-25?
Individuals with an annual income of Rs. 3,00,000 or higher are required to file their Income Tax Returns (ITR) under the new tax regime irrespective of their age.
Under the old tax regime, the basic exemption limits were as follows:
- Rs 2.5 lakh for individuals below 60 years
- Rs 3 lakh for senior citizens between 60 to 80 years
- Rs 5 lakh for super senior citizens.
You must file your ITR if:
- You earn income from multiple sources, including investments, residential properties, capital gains, and others.
- You have investments or earnings from foreign assets.
- Your deposits in current accounts across one or more banks total more than one crore rupees.
- You have paid over Rs 1,00,000 as electricity charges in a year.
- You have made payments exceeding Rs 2,00,000 for foreign travel
What are the required documents for a salaried person to file an ITR?
You need to collect all the documents that are relevant to your income tax filing. These include Form 16 (TDS certificate) and any other documents that show your income, deductions, and exemptions. However, if you don’t have Form 16, you can still compute your income using other documents like salary slips, bank statements, and investment statements.
You can also get information about your TDS and TCS from Form 26AS, which is available on TRACES through the Income Tax Portal.) Keep Form 16A, Exemptions under Section 80D and 80U, and Capital gains statement handy if applicable.
Which ITR form is applicable for salaried employees?
- ITR-1: ITR-1for salaried employees, also known as SAHAJ, is a simplified tax form designed for resident individuals whose total income doesn’t exceed INR 50 lakh. This form is suitable for those who earn income from sources such as salary or pension, rent from a single-house property, and other sources like interest and dividends. Additionally, individuals with agricultural income up to INR 5,000 can also use this form.
- ITR-2: ITR-2 is intended for both individuals and Hindu Undivided Families (HUFs) who meet specific criteria. These criteria include not being engaged in any profession or business that qualifies for ITR-1, holding foreign assets, investing in unlisted equity shares, or being a director of any company.
- ITR-3: ITR-3 is meant for individuals with business and professional income in addition to income from other sources like salary, capital gain, interest, and dividend income. However, it’s not applicable to salaried individuals unless they have income generated from a business or profession.
- ITR-4: ITR-4 is designed for individuals with a total income of up to INR 50 lakh, particularly those with business income under presumptive taxation sections 44AD, 44ADA, or 44AE. It’s important to note that ITR-4 cannot be used by individuals who are either directors of a company or have invested in unlisted shares of a company.
When should a Salaried individual File ITR?
Why Should Salaried Individuals File Income Tax Returns?
Claiming Refunds: When the tax you’ve paid in advance, based on your self-assessment, is more than the tax you owe according to the regular assessment, you’re eligible to claim a refund. Filing an Income Tax Return (ITR) for a financial year allows you to request a refund for excess tax deductions, including refunds related to Tax Deducted at Source (TDS) on rent or fixed deposits.
Simplified Loan Applications: An ITR is a crucial financial document that details your annual income. Banks and financial institutions often require it as proof when you apply for loans, such as home loans. Even if your income isn’t taxable, filing an ITR can improve your chances of loan approval.
Visa Application: Some foreign embassies may ask for your ITR receipts from the past two years when you apply for a visa. This document demonstrates your income source in India and can enhance your chances of obtaining a visa.
Managing Capital Gains or Losses: Filing an ITR is particularly advantageous for individuals who invest in the stock market. Based on the ITR you submit for a financial year, any short-term capital losses can be carried forward for up to eight years.
Now that you know how to file your Income Tax Return online if you still need assistance while filing your ITR, our team of tax professionals (Online CAs) can help you understand taxes while filing your ITR with 100% accuracy and maximum tax refund.
Frequently Asked Questions
Salaried individuals whose total income exceeds the basic exemption limit prescribed by the Income Tax Department must file an Income Tax Return (ITR). This includes income from salary, house property, capital gains, business, profession, and other sources.
Salaried individuals generally use ITR-1 (Sahaj) if their income is up to ₹50 lakh and includes salary, one house property, and other sources. ITR-2 is used if income exceeds ₹50 lakh or includes foreign income/assets.
Essential documents include Form 16, salary slips, interest certificates, Form 26AS, investment proof for deductions, and bank statements.
Log in to the e-filing portal, choose the appropriate ITR form, fill in the required details, upload necessary documents, verify the return, and submit.
Deductions under Section 80C (up to ₹1.5 lakh), Section 80D (health insurance premiums), House Rent Allowance (HRA), and standard deduction are commonly available.
The due date for filing ITR for salaried individuals is usually July 31st of the assessment year. Extensions may be granted, which are announced by the Income Tax Department.