ITR Filing for Salaried Employees: Here's a guide on how to file ITR, checklist, importance and steps to follow for e-filing for Salaried individual.
In this article we will tell you how to e-File your tax returns or file your Income Tax return online if you are a salaried employee. When you are a salaried employee, salary is the main source of your income. You may have also interest income from bank.
As we will see, a salaried employee needs to choose Form ITR-1 Sahaj as the Income Tax return form if their total income is up to Rs 50 lakh.
Your employer would have issued the form 16 by now. The revised date for filing Income Tax returns is 31 August 2019. The ITR-1 form has been simplified this year, making it easier for salaried employees to e-File returns.
You can file your Income Tax return free at the E-Filing website of the Income Tax Department www.incometaxindiaefiling.gov.in/. You can also choose one of the several tax filing portals to e-File your taxes for a fee.
ITR form for a salaried person
Now let us come to what ITR form a salaried employee needs to choose. Depending on what kind of income you have, you have to fill a certain type of ITR form. If you are a salaried employee, you have to fill ITR-1 which is also known as the Sahaj Form. However, your income should be less than Rs 50 lakh per year. You can have income from house property and other sources excluding winning from lottery and income from race horses. If you are a director in a company or hold unlisted equity shares anytime during a financial year, then you are not eligible to fill ITR-1. You cannot file ITR-1 if you have taxable capital gains or have income from business and profession. You are also ineligible to fill ITR-1 if you have an agricultural income of more than Rs 5,000. Further income from more than one house property, carrying forward losses and so on makes one illegible to use ITR-1, in which case one has to file ITR-2.
When filling up ITR-1, taxpayers have to report gross salary and income from salary. All the exempt allowances such as HRA should be separately mentioned. The taxpayer also has to provide details of break-up for income earned from other sources like interest income on fixed deposits and so on. For more details you can visit the Central Board of Direct Taxes (CBDT) www.incometaxindia.gov.in and check the section ‘taxpayer services’
Checklist of Income Tax e-Filing for Salaried Employee
When E-Filing Income Tax returns, you need accurate information on income, deduction and taxes you have paid. Here is a checklist for you when e-Filing your Income Tax returns.
- Form 16: This is the most important document which your employee will provide you.
- Decide on the suitable ITR form: If you are a salaried employee and do not have income from some of the sources mentioned above, you have to fill up ITR-1 when E-Filing your taxes.
- Form 26 AS: Form 26AS is a consolidated record of the various taxes deducted from your income and deposited with the Government. Form 26AS can be downloaded through netbanking if PAN is mapped to that particular account.
- Savings Bank Account and FD interest: Keep the following documents ready.
- Bank statement or passbook for interest on your savings account.
- Interest certificates or TDS certificates from banks and Post offices
- Details of bank accounts and IFSC codes: You also need to keep ready details of all your bank accounts and IFSC codes because you need to list them in the ITR form.
Choosing the right way to e-Filing
From the financial year 2013-14, all tax payers earning more Rs 5 lakh must file their returns electronically.
You can file your returns online through the e-Filing website of the Government of India www.incometaxindiaefiling.gov.in.
There are two ways to file Income Tax returns online.
One of the ways is to download the ITR preparation software, prepare the return using the downloaded software, generate the XML and then upload it. The other is to directly enter details in an online form and submit it. However, the second method is available only for ITR-1 and ITR-4 so that salaried taxpayers can use it. You can choose either of the ways to E-File your taxes. However choosing the latter option is a better choice as it enables pre-filing of fields in the ITR from your PAN database or previous returns filed, thus saving time.
Importance of e-Filing for Salaried Employee
Now we will look into the importance of ITR filing for a salaried employee. Here one needs to remember that the Central Board of Direct Taxes has made rules stricter for tax evaders.
It shows that you are a responsible citizen: According to Income Tax law, individuals who earn a specified amount of income every year are required to file a tax return within due date. Filing your returns is a sign that you have duly paid the tax payable and that you are a responsible citizen.
To get a loan or a credit card: If you have filed your Income Tax returns regularly, it is proof that you have a regular income and have paid taxes on it and it is easier to get a loan or a credit card.
Claim tax deductions: To claim deductions under various sections of the Income Tax Act it is important that you have filed your Income Tax returns every year.
Claim tax refund: Filing your returns is crucial if you want to eligible for a refund and want to claim it.
Adjust your capital gains and losses: Capital losses can be adjusted against capital gains. Also as a taxpayer, you can ensure that in case you have any capital loss, you can carry it forward for the next eight consecutive financial years if you file your Income Tax returns regularly.
Visa processing: If you are applying for a Visa, the foreign consulate would require proof of your income and Income Tax receipts are required.
Steps to follow for e-Filing for Salaried Employee
Now we will take a look at the steps to follow for e-Filing of returns if you are a salaried employee.
Step 1: Login to the e-Filing website with a User ID, password, Date of Birth/Date of incorporation and captcha.
Step 2: Go to ‘e-File’ and click on ‘Prepare and submit ITR online’.
Step 3: Select the Income Tax return Form (ITR-1) and assessment year
Step 4: Fill in the details and click the ‘Submit’ button
Step 5: Upload a digital signature if applicable. Ensure that DSC is registered with e-Filing.
Step 6: Click on the ‘Submit’ button
Step 7: On successful submission for form, ITR-V would be displayed ( if DSC is not used). Click on the link to download the ITR-V. ITR-V will also be sent to the registered email. If ITR-V is uploaded with DSC, the return filing process is complete.
If the return is not uploaded with DSC, the ITR-V form should be printed, signed and submitted to CPC within 120 days from the date of e-Filing. The return will be processed only after the signed ITR-V is received. Check your email and SMS regularly for reminders on the non-receipt of ITR-V.
The process of filing your returns online is now complete.If you are a salaried employee, e-Filing of income tax returns is a pretty easy process as long as you keep a few things in mind.Subscribe to Moneycontrol Pro and gain access to curated markets data, trading recommendations, equity analysis, investment ideas, insights from market gurus and much more. Get Moneycontrol PRO for 1 year at price of 3 months at 289. Use code FREEDOM.