How to File Income Tax Return Online for Salaried Employees?

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.

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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

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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.

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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.

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How to file income tax returns online using Tax2win portal for salaried employees?

Here's a simplified guide on how to file ITR for salaried employees using Tax2win:

• Sign In or Sign Up: Begin by signing in to the Tax2win website with your existing credentials or create a new account if you're new to the platform. You can use this self-filing option if your income sources include salary, business, or capital gains.
• Income Source Selection: After logging in, you'll encounter a table listing potential sources of income. Select the ones that apply to you. Tax2win's DIY ITR system will then identify the suitable ITR form based on your selections.
• Form 16 Upload: If you possess Form 16, upload it. If not, you can skip this step and proceed.
• Financial Year and PAN Details: Specify the Financial Year and enter your PAN details along with your Date of Birth. If you don't have a registered account with the Income Tax Department, an OTP will be sent to you, and a new account will be created. You also have the option to allow Tax2win's DIY software to fetch your personal details and pre-fill the necessary data.
• Basic Personal Details: In this step, provide essential personal information, such as your name, email ID, date of birth, father's name, gender, and so on. Verify this information for accuracy.
• Address and Employer Details: Fill in your address details and select your employer category as required.
• Employment Details: If you are a salaried employee, the standard deduction will be applied automatically. Enter details such as your gross salary/CTC, exempted allowances (e.g., HRA, LTA, gratuity), net salary, standard deduction, and professional tax under section 16. If you've uploaded Form 16, your employment data will be pre-filled, and you just need to verify it.
• Investment Details: Input information about investments made during the year to calculate applicable deductions. Include details on investments in PPF, LIC, PF, housing loan, FDR, NSC, tuition fees, premiums paid for annuities, and other 80C deductions.
• Bank Details: Provide your bank details, including IFSC code, bank name, account number, and Aadhaar details. Government regulations require displaying all bank details. You can designate one account as your primary account, where you'll receive a TDS refund.
• Form 26AS Upload: Upload Form 26AS, and your TDS details will be automatically populated. If you don't have Form 26AS, you can skip this and manually input the details before filing your ITR. If you've paid any tax other than on salary income, indicate "yes" for Advance Tax or self assessment tax and any tax paid from other income sources. Enter the relevant receipt details and continue.
• Return Filing Type: Select "Original Return" as your return filing type. If your income is less than Rs. 2.5 lakhs and your electricity expenses for the year are less than 1 lakh, select "yes" for the option 'Are you filing a return under the seventh proviso to section 139(1).' Additionally, specify the number of days you stayed in India during the relevant FY, and the system will automatically determine your residential status.
• Tax Computation: Based on the information provided in previous sections, the software will compute your tax liability using both the old and new tax regimes. You can compare both and choose the one that benefits you more.
• Verification and Filing: Before finalizing, review all the information in your return, check the relevant checkbox, and click "File my return." Congratulations, you've completed the filing process! Don't forget to e-verify your ITR simultaneously.

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When should a Salaried individual File ITR?

If you're employed, it's important to know that you should only file an income tax return when your income goes beyond a threshold limit. For the financial year 2023-24, the old tax regimes have a basic exemption limit of ₹2,50,000. However, the exemption limit under the new tax regime has been increased to ₹3,00,000.

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Why Should Salaried Individuals File Income Tax Returns?

Claiming Refunds: When the tax you've paid in advance, based on your self-assessment, is more than the tax you owe according to the regular assessment, you're eligible to claim a refund. Filing an Income Tax Return (ITR) for a financial year allows you to request a refund for excess tax deductions, including refunds related to Tax Deducted at Source (TDS) on rent or fixed deposits.

Simplified Loan Applications: An ITR is a crucial financial document that details your annual income. Banks and financial institutions often require it as proof when you apply for loans, such as home loans. Even if your income isn't taxable, filing an ITR can improve your chances of loan approval.

Visa Application: Some foreign embassies may ask for your ITR receipts from the past two years when you apply for a visa. This document demonstrates your income source in India and can enhance your chances of obtaining a visa.

Managing Capital Gains or Losses: Filing an ITR is particularly advantageous for individuals who invest in the stock market. Based on the ITR you submit for a financial year, any short-term capital losses can be carried forward for up to eight years.

Now that you know how to file your Income Tax Return online if you still need assistance while filing your ITR, our team of tax professionals (Online CAs) can help you understand taxes while filing your ITR with 100% accuracy and maximum tax refund. Book eCA Now!

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