ITR Salaried
Salaried individuals must file ITR to report income, claim deductions, and pay taxes. Form 16 is essential for filing.
- Who is a salaried employee for e-filing of ITR?
- What are the Basic Exemption Limits for FY 2023-24?
- When should a Salaried individual File ITR?
- Which ITR form is applicable for salaried employees?
ITR Salaried
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ITR Salaried Overview
Salaried individuals are required to file an Income Tax Return (ITR) if their annual income exceeds the basic exemption limit, which varies based on age. The process involves reporting salary income, tax deductions, and any other eligible income or deductions. Form 16, provided by the employer, contains details of salary, TDS (Tax Deducted at Source), and deductions under various sections like 80C and 80D. The common ITR form for salaried individuals is ITR-1. Filing ITR helps claim refunds for excess TDS, avoid penalties, and maintain financial transparency. Timely filing is essential for compliance and future financial activities.
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 2023-24?
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.
While ITR-1 and ITR-2 are typically suitable for salaried taxpayers, the choice of the appropriate ITR form depends on the nature of one’s income, and it is essential to analyze this to determine the correct form to use for tax filing.
FAQ ON ITR SALARIED
The deadline for salaried individuals to file their ITR is typically July 31st of the assessment year. However, it can be extended based on government notifications.
Key documents include Form 16 (issued by the employer), salary slips, bank statements (for interest income), investment proofs (for claiming deductions), and Form 26AS (showing TDS details).
A salaried individual typically uses ITR-1 (Sahaj) for filing, provided they do not have income from business, capital gains, or foreign assets.
Yes, salaried individuals can claim various tax deductions under sections like 80C (for investments), 80D (for health insurance), and 80G (for donations), among others.
If you miss the deadline, you may have to pay a late filing fee, and any tax refund due might be delayed. You can still file a belated return, but penalties and interest may apply.
