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Income Tax Return Filing guide for salaried employee

How to file an income tax return for salaried employee

Income Tax Calculator 
In this post, you will find a complete step by step guide on how to file Income Tax Return (ITR) online. The intention of this post is to clear the doubts towards the income tax return. The motto of the post is to self-educate the taxpayers to be accurate while filling an income tax return online.

Are you encounter with the word ITR for the first time? Or, you may be eager to gather a depth knowledge on ITR before processing your own. Then, you are absolutely in the right place to settle down all your queries. Let's begin.

Table of contents

What is an income tax return?

Who can file the income tax return?

Is income tax return filing compulsory for all?

Do you need to file your income tax return?

Consequences of late filing income tax return

Online income tax return filing- a complete guide

Tax slab for the financial year 2020-21

Some misconceptions on income tax return filing


What is an income tax return?


An income tax return is a declaration by the taxpayer in a specified form about the details of his income, savings and taxes paid, if any, in a financial year. In this context, income denotes the gross income from salary/wages/ pension/ business/ venture and income from house property. It also includes the income from investments, income from long term and short term capital gains.
We need to submit our income tax return before the predetermined due date. So, the IT department can assess the return to find the actual tax liability.

Who can file the income tax return?


Filing of income tax return means to submit the details of income during a financial year to the income tax department. In accordance to IT rules under section 139(1), individuals having gross income more than the basic exemption limit can voluntarily file ITR before the last date. Even in case of nil income or income having zero tax liability, you can also file your return. Moreover filing even a nil return has its own benefits too.

However, you can file your ITR in both the ways through online or offline (manual). But, online filing of income tax return is easier and more convenient than filling and submitting the hard copy manually to a specific centre.

The concept of gross income and taxable income.


Here you must understand the basic difference between gross income and taxable income.

To determine whether the income tax filing is compulsory for you, you have to analyze your gross income first.
Gross income is the total income from salary/ wages/ pension, from savings, from house property etc. before any deductions.

To calculate your tax liability, you need to calculate your taxable income.
Taxable income is the income after the deductions for savings and some other expenses from gross income.


Is income tax return filing compulsory for all?


Income Tax Return filing is not compulsory only when your gross income is less than the maximum exemption limit i.e. rupees 250000 (in case you are below 60 years) and also you have no claim of refund. But, filing ITR is mandatory if your gross income exceeds rupees 250000 before any deductions.
Especially, income tax efiling is a must for individuals having taxable income more than rupees 500000.

The basic exemption for the income tax return filing


According to the Income Tax Act 1961, the maximum amount of income exempted for having any tax liability is termed as the basic exemption limit. Hence, individuals having taxable income less than the said limit will not be liable to pay any tax.
At present, the basic exemption limit is rupees 250000 for an individual below 60 years.

However, the exemption limit varies in different age groups. The maximum exemption limit is rupees 300000 for individuals below 80 but more than 60 years. And the limit is rupees 500000 for above 80 years. It is not necessary to file an income tax return if your gross income is not more than the exemption limit. But, income tax return filing is compulsory before the due date if your income exceeds such exemption level.

Do you need to file your income tax return?


You do not need to file your income tax return just because you have been allotted a PAN. Rather, you need to possess a PAN, if you intend to file a return in any case. There are no mandates from the government for filing the income tax return if your gross income is lower than the basic exemption limit. On the contrary, you are bound to file your return if your income is more than the limit.

So, Your taxable income may be or may not be more than the basic exemption limit. You may have paid tax or not. But, these are not the only case to file a return compulsorily. In addition, income tax return filing is mandatory in the following cases:

Filing of an income tax return when it is mandatory


  1. Gross income is above the basic exemption limit as per IT rules.
  2. You have any claim of refund for excess deduction of TDS from your savings.
  3. To carry forward your losses.
  4. If you have paid any tax as per income tax calculation.
  5. Income that comes from property under a trust.
  6. Filing an income tax return is mandatory for every firm or company irrespective of their profits or losses.
  7. If an NRI earns from India, his income becomes taxable. So, he needs to file his income tax return.
  8. Being an Indian resident if you possess any property outside India, you should file your return.
  9. Moreover, to process your loan or visa application, you need to furnish your return acknowledgement to the institution.

Online Filing of the income tax return - when it is a must.


As per IT Act 1961, filing an income tax return is mandatory for income above the basic exemption limit. In some cases, income tax return e-filing is the must. E-filing of return is nothing but an online submission of a return. In the following cases, efiling of the income tax return is mandatory.

  • Individuals having taxable income more than rupees 500000.
  • If you have a claim of refund for excess deduction of TDS.
  • Filing a return other than itr-1 and itr-2.


Consequences of late filing income tax return


An income tax return should be filed within the due date. The due date for filing return for the financial year 2019-20 is 30th November 2020. It may be extended.

If you fail to file your income tax return before the due date declared by the CBDT (Central Board of Direct Tax), Income Tax Department can impose a penalty of Rs. 5000 upon you. Even, the penalty may raise to Rs. 10000 under section 271(1) unless you complete your filing your return within 31st December. Here to mention that if your taxable income is not more than rupees 500000, the maximum amount of penalty will be rupees 1000 only.

Income Tax Return Forms- ITR form


There are several categorized forms range from itr-1 to itr-7 to file a return. Choose your form accordingly.

If you are a salaried person and your annual income is not more than 50 Lacs, ITR 1 is applicable for you. ITR form 1 is also applicable to those who earn their income from not more than one house property. The persons having other sources of income such as bank interest can also file ITR 1.


How to file ITR 1? Online income tax return filing- a complete guide.

efiling of income tax return


Finally, we have arrived in the most interesting part of the article. Here you can learn how to file income tax return online with the screenshot. In this section, you will find a step-by-step guide that will help you to file your income tax return online.

Steps to follow for filing income tax return:



Last-minute checkup before processing an income tax return:


Before you proceed further, you need the following things readily available with you.

  • Pan card
  • Aadhar no. (link your Aadhar with your pan)
  • Form 16 or annual salary statement or payslips.
  • Other income details (interest from savings and FDs)
  • Bank details: Account no & IFS Code (If any refund has been processed it will be credited on this bank account)
  • Mobile no.
  • Email address


Registration for efiling of income tax return


You can skip this step and start from 'login to e-filing portal' if you already have your user ID and password.


Registration for efiling of income tax return

If it is your first time to file your income tax return online, you need, at first, to get yourself registered on e-filing official portal. You have to complete all the four steps for this registration process.


Here, you are asked to provide your basic details like name, PAN no., Date of birth, resident or NRI. The details should match your PAN database.

Next, you need to fill the other details along with mobile no. and email in a registration form. In this step, you will create your login password. And also select two secret questions to answer. It will help you in the recovery of the password if you forget.

After that, you have to verify your registration. You will receive an email containing the activation link in your registered email id. Go to your email account and click the said link. You will be directed to a page to submit your Mobile pin received via an SMS.

At last stage, you will get the notification saying that your account has been activated successfully.


Thus, you will get your user ID and password for the efiling portal. Your login ID is your PAN no. and your password is what you have created on the registration process.

How to file Income Tax Return online for salaried employees

Log in to e-filing portal


Hence, you have your PAN no. as user ID and password that you have already created. Now, visit the efiling portal here to login.
Next, put your user id, password and captcha code to log in. Then press the 'Login' button.



How to file Income Tax Return online for salaried employees

Choose your ITR form, assessment year etc


After login to the portal, you will find the dashboard section. Here you have to click 'filing of income tax return' link. It will open 'e File' section. Now, you have to choose the assessment year, ITR form Number, filing type and submission mode one by one from the drop-down menu. Then submit your choice.


guide on income tax return

Update your personal details


By following the previous step, you will reach to the instruction page. At the bottom of the page, you will find a forward arrow. Click the arrow symbol to go to the next page. The next page is for personal details. Fill the page accordingly. Here, some data will be automatically fetched from your PAN database. Special attention is required to fill the filing status from entries no. A19 to A23. Again press the forward arrow at the bottom of the page to go to the next.


Fill income details


Now, in this section, you have to provide all the income details such as income from salary/ pension, from house property, from other sources etc. You need to provide the details of your savings to claim your tax rebate under section 80C to 80U. Next, you will notice at the lower part of the page, an auto-generated Tax calculation section. It automatically calculates your tax. Then, press the next at the bottom.


Check your tax details

Online income tax return filing

 


Here, you can verify all the taxes paid by you in different fields like from salary, from bank savings etc.


Provide your bank details

How to file ITR1

 


After that, fill the section of bank details properly. You can add more than one bank details. If you have any claim for refund in your income tax return, the money will be credited in this bank account. Now, click save & preview button.


Preview your income tax return and proceed


This is the section for recap all the entries from the beginning to end in a single page. Review the Page thoroughly. If you find any error then you can modify the data and save again. When you find everything is ok then go ahead and press the submit button.


E verify your income tax return


Lastly, you have been prompted to verify your return. After filing your income tax return successfully, you need to verify your return. To verify your income tax return you can also go to 'My Account' tab and click on 'E-Verify Return' from the drop-down menu. You will find three options regarding the e-verification of the return.

  • "Option 1: I already have an EVC to E-Verify my return."
  • Then, "Option 2: I do not have an EVC and I would like to generate EVC to E-Verify my return."
  • And, "Option 3: I would like to generate Aadhaar OTP to E-Verify my return."

If you have a mobile number registered with Aadhar, go for option 3. When you click the Aadhar OTP option, a new window will appear. There you have to enter the Aadhar OTP received on your registered mobile no. After entering the OTP properly, hit the submit button placed below. Thus you can file your income tax return online and e-verify the same successfully.


Download ITR V (Acknowledgement of your income tax return)


At last, you should download the ITR V and take a print out to keep a physical record with you. To download the ITR V go to "My Account" tab. Here also you will find a drop-down list. Select the "View e-Filed Return/Forms" from the list. Now, you have to choose "Income tax returns" and press the submit button. In the next window, click on the respective acknowledgement number. After that click on ITR -V in the download column.
Have a look at the bottom of the acknowledgement, it says "DO NOT SEND THIS ACKNOWLEDGEMENT TO CPC, BENGALURU". If it is not in your case, it means that you have not e-verified your income tax return properly.


Tax slab for the financial year 2020-21


Tax slab for the calculation of income tax for the Financial Year 2020-21 (AY 2021-22) as follows:

For New Tax Regime:


Taxable Income
Tax Rate
Up to Rs.250000
Nil
Rs.250001 to Rs.500000
5%
Rs.500001 to Rs.750000
10%
Rs.750001 to Rs.1000000
15% 
Rs.1000001 to Rs.1250000
20%
Rs.1250001 to Rs.1500000
25%
Above Rs.1500000
30%

For Old Tax Regime:


A. For individuals below 60 years
 
Taxable Income
Tax Rate
Up to Rs.250000
Nil
Rs.250001 to Rs.500000
5%
Rs.500001 to Rs.1000000
20%
Above Rs.1000000
30%


B. For senior citizens ( 60 years to below 80 years)

Taxable Income
Tax Rate
Up to Rs.300000
Nil
Rs.300001 to Rs.500000
5%
Rs.500001 to Rs.1000000
20%
Above Rs.1000000
30%



C. For super senior citizens above 80 years

Taxable Income
Tax Rate
Up to Rs.500000
Nil
Rs.500001 to Rs.1000000
20%
Above Rs.1000000
30%

Some misconceptions on income tax return filing


I have a PAN so I have to submit my income tax return


Filing of the income tax return must require a valid PAN. But, only possessing a PAN ( Permanent Account Number) does not mean to file IT return is mandatory.

As per IT ACT 1961 every citizen of India whose annual gross income is more than the basic exemption limit (presently Rs.250000) must process his or her tax return. But, individual having an annual income less than Rs. 250000 do not need to file ITR.

No need to file IT return if income is not taxable


It is mandatory to file a return if gross annual income is more than rupees 250000. Gross income is the total income from salary/ wages/ pension, from savings, from house property etc. before any deductions.Even in case of nil income or income having zero tax liability, you can also file your return. Because ITR filing even with zero tax has many benefits too.

If my tax liability is Nil I should not file a return


Though your tax liability may become nil after the deductions for your savings and other expenses, filing an income tax return is mandatory in the following cases:
If your gross income before any deductions is more than the basic exemption limit.
If you have any claim of refund for excess deduction of TDS.
You need a return acknowledgement if you intend to apply for a visa or loan.

My income is below rupees 250000, I cannot file ITR


Any Indian citizen can file his/ her Income Tax Return irrespective of income group. But, it is not mandatory to file IT return unless your gross annual income is higher than Rs. 250000.
Though in many cases, you need to file a return even your Gross Income is below basic exemption level. A few of them are as follows:
1) To claim a refund.
2) Intend to have an income proof certificate
3) To furnish return acknowledgement to the bank for processing your loan.

I have already paid my income tax so I have nothing to do with the tax return.


Paying Income Tax as per your income level is not enough. Rather, after the end of the financial year, you have to file your ITR showing all your income savings deductions and liability of tax that you have paid so that Income Tax Department may scrutiny and assess your return. You should not skip this process else you will be penalized from the IT department as per their existing rules.

Income from fixed deposit interest can only be shown in a return after the maturity of the same.


Most of the bank credit interest on fixed deposit quarterly basis. Hence, it is wise to show annual accrued interest on your fixed deposit in your tax return. Otherwise, on the date of maturity interests will be clubbed and may increase your tax liability to the next higher bracket.

Filing of income tax return online is a very complex time-consuming thing and needs to hire a professional.


It is absolutely wrong conception to think that ITR filing online is very much complex subject with numerous calculations. On the contrary, it is easier and more convenient to file your return online than to do it manually. In this era of internet, the tedious job of ITR filing can easily be done even from a hand holding smartphone.

Conclusion:


Hope you like the post. If you find it helpful in any way, please share the article to help others. Also, feel free to comment for further queries on income tax return filing. ITR Guide will do its level best to answer all the queries with proper explanations. You can also bookmark the page if you consider it deserves such worth reading. Thanks for reading.

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