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Your Complete Guide to ITR Filing for Salaried Employees in India
Filing an income tax return (ITR) can be overwhelming if you’re doing it for the first time, especially if you’re a salaried employee. This guide on ITR filing will walk you through everything you need to know about ITR filing so that you can meet the deadline and make sure your taxes are as small as possible. This includes calculating your income, tax deduction and filing the form itself, which will help you get all of your deductions so that your take-home salary remains high.
Identify your Income
The first step is to check your Form 16, which will tell you your total income and tax deducted at source. This information can be used as an estimate of your gross annual income. If you are employed on a contract or per project basis, you need to add all of your taxable earnings from these sources together and use that number as your annual income.
Input Income on Form 16 Section: Calculate Income Tax Liability
Since your income is declared in Form 16, you should be able to estimate your taxable income on your own. Look up your gross salary and add any income from interest and dividends, etc. If you need help, you can use a calculator that automatically accounts for deductions such as HRA (house rent allowance), education loan repayments and medical expenses.
In case of LTCG (Long Term Capital Gains), ensure that you have the correct asset details
nature of asset, period held and purchase date. Short-term capital gains are taxed at 15% or 20% depending on income tax slab and long-term capital gains at 20% irrespective of income tax slab. Further, short-term capital gains from equity can be exempted from tax if an individual has made investments through: a) SIPs b) Systematic Investment Plans c) a mutual fund scheme.
Check if you qualify for any exemption Section: If there are any tax implications, make provisions accordingly Section: File IT Returns atleast 30 days before due date
If you fail to file your returns, interest and penalties can be levied Section: Don’t forget about section 80C which are exempt from tax deductions.
What happens if I file my return late?
If you don’t file your tax return within six months, you’ll be levied a penalty of Rs. 5,000 as late filing fee. You will also be charged interest of 1% per month on all outstanding taxes from April 1 to December 31 (Rs. 500 per month), until you file your return and pay taxes due. If these fees aren’t paid along with filing your tax return, it will invite another penalty of Rs. 10,000 from IT department.
Who can guide me?
What’s your profession? What do you do at work? Well, accounting is one of them. Accounting professionals have been filing Income Tax Returns (ITR) since time immemorial, and they are experts at it. However, they are probably too busy with their jobs to guide people on how to file an ITR as a salaried employee.
How do I get a Proof of Deposit (PoD)?
It’s best if you have a copy of your PoD from your bank, but if you don’t, you can get one from any branch of that particular bank. If all else fails, ask your employer’s bookkeeper or accountant.
Tax Refund
Your salaried employees are liable to deduct TDS under Section 194-A. So, a part of your salary payment is deducted and deposited with Income Tax Department. Later on, when you file your income tax return (ITR), these amounts will be adjusted against your actual tax liability, which means that you will receive a refund as a result.
Who is eligible for an Income Tax refund India?
You may be eligible for a refund in a variety of circumstances. Among them are:
- If the tax due on regular assessments is decreased as a result of an error in the assessment procedure being corrected.
- If the tax paid amount is negative after taking into account the taxes you've paid and the deductions you're allowed.
- If the tax you paid in advance on the basis of self-assessment is greater than the tax you owe on a regular basis.
- If you have unreported investments that provide tax advantages and deductions.
- If your TDS from salary, interest on securities or debentures, dividends, or other sources exceeds the tax payable on a regular assessment basis.
- The same income is taxed both in India and in a foreign country (with which India has an agreement to avoid double taxation).
ITR for salaried employee
If salary is your main source of income, you must file an ITR for salaried employee, commonly known as a SAHAJ, for the assessment year 2019-20 for income generated during the financial year 2018-19.
Eligibility to file a Form ITR-1
ITR-1 forms are required to be filed by all residents whose principal source of income is salary. This form is also for those who earned money during the financial year through a pension, a single-family residence, or income from other sources such as the lottery or a horse race.
However, total revenue for the assessment year should not exceed Rs. 50 lakhs. The ITR-1 form is unsuitable for you if you are a company director, have held unlisted shares in the previous year, or have income or assets outside of India.
How to Complete the ITR-1 Form?
- Start by entering your password and ID
- Choose the proper form and year
- Fill in the income details from Form 16 such as salary breakdowns, tax payments, deductions, and so on.
- Recheck all of the information and submit the form.
- You must validate it because filing an ITR is insufficient. Otherwise, your return will be rejected. The verification can be done either offline or online.
While this is a basic guide to give you knowledge about the process of ITR for salaried employee, our experts will do the process for you. Since we like to maintain transparency with our clients, here is a little peek of how we do it. For more details, you can email us at sales@app-taxcom.sbq43yerxi-eqg35wop83xn.p.runcloud.link or give us a call at 022-48930377.
