For salaried persons in India, the timely filing of income tax returns (ITR) is crucial. However, there are various misconceptions about how to file returns, along with a general lack of information. To address this, we will throw some light on this topic today and answer all your questions about how to submit ITRs online if you are a salaried employee.
Overview of ITR
The Income Tax Act, 1961, requires Indian taxpayers to fill out a document detailing their earnings and the relevant taxes. This can be done through a form called ITR. Furthermore, the income information supplied in this form is for a specific financial year, i.e., a year that begins on April 1st every year and ends on March 31st the following year.
Before we get into how to submit income tax forms for salaried employees, it is important to understand who needs to file them. Individuals who fit into one of the following groups must file an ITR: An individual whose gross income is above the basic exemption under Section 80C, Section 80 D, and Section 80CCD is eligible for filing an ITR.
Basic Exemption Limits
| Age | Gross Income |
|---|---|
| Till 60 years | Rs. 2.5 Lakhs |
| In between 60 - 80 years | Rs. 3 Lakhs |
| Above 60 years | Rs. 5 Lakhs |
Here are some of the conditions that necessitate an individual to file an ITR:
An individual who earns money from several sources, such as residential property, capital gains, investments, etc.
Individuals who have foreign assets as investments or as a source of income
A person who has more than Rs. 1 crore in bank deposits in one or more banks is an assessee
An individual who has paid more than Rs. 2 lakh on a person's international journey
An assessee who has paid more than Rs. 1 lakh in power rates during a calendar year
How to File an Income Tax Return Online
Let us see how to submit an ITR online for a salaried worker now that you are familiar with when you need to file one. Simply follow the instructions listed below:
Step 1: Visit the e-filing portal of the Income-tax (IT) department.
Step 2: Enter your user ID (Permanent Account Number or PAN), password, and Captcha code to log in to your account. If you have not already done so, you can create an account using your PAN, which functions as your user ID.
Step 3: In the e-file screen, choose the assessment year from the dropdown and click Income Tax Return. At this stage, you must pick and download the right ITR form. ITR-1, ITR-2, and ITR-3 are the relevant options for salaried personnel.
Step 4: If your purpose is not to file a revised return, choose Original as the filing type.
Step 5: Click Continue after selecting Prepare and Submit Online.
Step 6: Fill out the ITR form completely, including all the relevant information regarding your earnings, deductions, exemptions, and assets. You will then need to submit information concerning TDS (Tax Deducted at Source), TCS (Tax Collected at Source), and advance tax payments. Ensure all the information you have entered is correct. Select the Save The Draft option frequently to avoid losing data due to technical issues.
Step 7: Calculate and pay the tax due. At this stage, insert the challan information on your tax return. If you do not owe any money in taxes, you may skip this step.
Step 8: Double-check the information you have submitted through the form. Then press the 'Submit' button, and you’re done! This is how a salaried employee can file an ITR online.
A notice will then appear on your computer screen indicating that e-filing is successful. Following this, an acknowledgement form, known as ITR-V, is created. You can use the methods given below to validate your returns:
- One-Time Password (OTP) for Aadhaar
- Bank account information
- Registered cellphone number
- Demat account number
- Net banking
- Bank ATM
- Post a physical copy of the acknowledgement to the Centralised Processing Centre (CPC) at Bengaluru
ITR Forms
Salaried persons in India can choose from a variety of ITR forms:
ITR-1: ITR-1 is used to file income tax returns for salaried employees with a total income of up to Rs. 50,000,000. The total income includes profits from other sources of income and wages. An assessee, on the other hand, should not have more than one home property to submit an ITR-1. In addition, his or her agricultural income should not exceed $5,000 (Rs. 374,067).
ITR-2:This form is for salaried individuals with a total income of more than Rs. 50,000,000. Individuals who own more than one home are also entitled to submit ITR-2. Also, if you earn returns from capital gains and/or other sources but not from earnings or gains from a company or profession, you can file income tax returns using ITR-2.
ITR-3:As a salaried employee, if you get income from salary, company, profession, house property (one or multiple), capital gains, or other sources, you can submit an ITR-3.
When Should a Salaried Employee File an ITR?
If you are a salaried employee, you should know how to submit an ITR. You should be aware that such a filing is only required if your taxable income exceeds the exemption level. This exemption, under both old and new tax regimes, is a maximum of Rs. 250,000 as of 2022. If you make more than Rs. 250,000 in taxable income, you must submit an ITR before the deadline.
What are the Benefits of Filing Income Tax Returns for Salaried Employees?
After the question, how to submit an ITR for a salaried individual, this is probably the second-most common question. So, let us explain why salaried people should submit ITRs by pointing out the advantages:
- Capital gains and losses can be adjusted
If you invest in the stock market and purchase or sell shares, you need to file ITRs. Furthermore, when you file your ITR for a specific fiscal year, you can carry forward your adjusted short-term capital losses for up to 8 years. - Tax refunds can be claimed
You can only collect tax refunds if you file your ITR for the financial year after the tax has been deducted. As a result, once you submit returns and claim your preferred tax deduction, TDS on rent payments or fixed deposits is refunded. - Loan applications can be easily made
An ITR is more than just a financial statement. It also contains information about your annual earnings. As a result, when you apply for loans such as a home loan or car loan, banks and NBFCs frequently request copies of ITRs. Furthermore, compared to an individual with the same income but no ITRs, submitting returns even when you do not have a taxable income boosts the likelihood of loan acceptance. - Processing of visas
Several foreign consulates ask for ITR receipts for the previous two years during a visa interview. Producing this document demonstrates that a person has a significant source of income in India, which improves his/her chances of getting a visa.
Blog Summary:
- According to the IT Act, 1961, Indian individuals should file their earnings and applicable taxes using the ITR document.
- An individual whose gross income is above the basic exemption under Section 80C, Section 80 D, and Section 80CCD is eligible for filing an ITR.
- Based on the income levels, ITR forms vary from one taxpayer to another.
- ITR filing can be done on the e-filing portal.