How to File an Income Tax Return online for Salaried Employees

How to File an Income Tax Return online for Salaried Employees

Now that you are familiar with filing income tax returns, let us elaborate on filing ITR online for a salaried person. Follow these steps:

  • Step 1: Navigate to the e-filing portal of the Income Tax Department. 
  • Step 2: Log in to the portal by submitting your user ID (PAN), password, and a Captcha code. If you are not registered with this portal, you can sign up using your Permanent Account Number (PAN), serving as a user ID.
  • Step 3: Under the e-file section, click on ‘Income Tax Return’ from the drop-down menu and select the relevant assessment year. At this point, you need to select the appropriate income tax return (ITR) form and download it. Salaried employees can opt for ITR-1, ITR-2, or ITR-3 (which we shall delve into later in this article).
  • Step 4: Select the filing type as ‘Original’ if you are not filing for a revised return.
  • Step 5: Choose the submission mode of ‘Prepare and Submit Online’ and click on ‘Continue.’
  • Step 6: Now, fill in the appropriate ITR form with all the necessary details about your income, deductions, exemptions, and investment. Then, you are required to add the details of tax payments through TDS, TCS, and advance tax. However, ensure that all data is accurate. Additionally, periodically click on the ‘Save The Draft’ option to avoid losing data due to technical errors. 
  • Step 7: Compute the tax payable and pay tax. Then, enter challan details in your tax return. (You should skip this step if you do not have any tax liability).
  • Step 8: Confirm the details entered in the form. Then, select ‘Submit.’ This is how you can file ITR online for a salaried employee.

  • At this point, a message flashes on your computer screen, prompting successful e-filing. Subsequently, an acknowledgement form called ITR-V is generated. Now, you must verify your return by way of any of these modes:

    • Aadhaar OTP
    • Bank account number
    • Demat account number
    • Registered mobile number
    • Net banking
    • Bank ATM
    • Sending a physical copy of the acknowledgement to the Centralised Processing Centre (CPC) in Bengaluru via post
    This is how you can file ITR for a salaried person.

  • ITR forms applicable for salaried employees

  • As mentioned earlier, salaried individuals in India can opt for any of the following ITR forms:
    • ITR-1 (Sahaj): Salaried employees with a total income of up to ₹50,00,000 must file their income tax returns with ITR-1. Here, the total income includes earnings under the ‘Income from Other Sources’ alongside salaries. However, to file an ITR-1, an assessee should not have more than one house property.  Additionally, their income from agriculture should not exceed ₹5,000.
    • ITR-2: It applies to salaried persons whose total income exceeds ₹50,00,000. Moreover, individuals with more than one house property are eligible to file ITR-2. Additionally, you can file income tax returns with ITR-2 if you generate income from capital gains and other sources, but not from profits or gains from business or profession.
    • ITR-3: As a salaried employee, you can file an ITR-3 if you receive income from salary, business or profession, house property (one or multiple), capital gains, and other sources.

  • When should a salaried employee file ITR?

  • If you are an employee, you should know more than just how to file an IT return for a salaried person. You should understand that filing is necessary only when your taxable income falls above the exemption limit. As of 2021, as per the old and new tax regime, this exemption limit is ₹2,50,000. So, if you earn more than ₹2,50,000 of taxable income, it is mandatory to file ITR before the due date.

  • Why should salaried employees file income tax returns?

  • This is perhaps the most common query after filing an income tax return for a salaried person. So, let us elucidate on why salaried employees should file ITRs by highlighting the benefits of doing so:

  • Adjustment of capital gains or losses

  • Filing income tax returns is especially for you if you invest in the equity market and buy or sell shares. Moreover, the adjusted short-term capital losses can be carried forward for up to 8 years when you submit the ITR for a given financial year.

  • Claim tax refunds

  • Once the tax is deducted, you can get tax refunds only by submitting your IT return for the financial year. Therefore, refunds on TDS on rent payments or fixed deposits get initiated after you file returns and claim your desired tax deduction.

  • Convenient application for loans

  • An income tax return is more than just a financial statement – it specifies your annual earnings as well. As a result, banks and NBFCs often require copies of ITRs to grant loans, such as home or vehicle loans. Moreover, filing returns despite having no taxable income increases the chances of loan approval compared to an individual with the same income but no ITRs.

  • Visa processing

  • At the time of the visa interview, several foreign consulates require you to furnish your ITR receipt for the last couple of years. Producing this document indicates that an individual has a considerable source of revenue in India, which
  • strengthening their candidacy for visa approval.

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