Income Tax Return Filing for Salaried Person

In India, the applicability of the Income Tax Return (ITR) form for the salaried person is based on several elements such as investments, source of income and other financial affairs. Generally, forms that are used for salaried employees during ITR filing are ITR-1 (Sahaj), ITR-2, ITR-3, and ITR-4 (Sugam). Read this article to know complete details about ITR for Salaried Employees.

Who is a Salaried Employee for ITR filing?

For income tax purposes, a person who receives a set salary from their employer in exchange for providing services under an employment contract is considered a salaried employee. The salaried person's income includes allowances, salary, privileges, and other benefits.

Once all exemptions and allowable deductions have been made as per the Income Tax Act of 1961, then the salaried person must have to pay income tax on the money received from the work. The salaried employee must have filed an income tax return by providing information such as deductions, income, taxes paid and any claim of refund.

The ITR form has been filed for the salaried employees with the Indian Income Tax Department. During the assessment year, the salaried employee has to provide details of their income and taxes paid in the particular year. The details provided by the salaried employees must be from the fiscal year that starts on 1st April and ends on 31st March of the said year.

Documents Required For ITR - Salaried Employees

Following are the documents required for ITR - Salaried Employees:

• Form 16 from your company
• Additional Form 16
• Form 26AS Tax Credit Statement
• Bank statement if the interest received is above Rs. 10,000/-
• Salary Slip of any month during the Financial Year
• Annual Statement

ITR Form for Salaried Employees

ITR forms, which are generally used for salaried employees, include the following:

1. ITR-1 (Sahaj): The form is applicable for those who have acquired income from pension, salary, one house property, and other sources, with a whole income of Rs 50 Lakh and income attained from agriculture of Rs 5,000.
2. ITR-2: ITR-2 is applicable for employees who have various sources of income such as pension, foreign assets, salary, capital gains, and several properties, but not from profession or business.
3. ITR-3: It is applicable for employees who have several sources, including business or profession, salary, capital gains pension, other sources, and foreign assets or income.
4. ITR-4 (Sugam): This policy is suitable for individuals and Hindu Undivided Families with income from various sources, excluding lottery and racehorse earnings.

Eligibility Criteria For ITR Salaried Employees

For paid workers, eligibility requirements usually center on things like age, residency status, and sources of income. Here are the main requirements for eligibility:

• Residential status: Salaried employees shall reside in India for the pertinent fiscal year as per the provision of the Income Tax Act, 1961. The resident status is also determined by the number of days an individual resides in India, both in the financial year and the year prior to it.
• Sources of Income: The primary source of income shall be pension or salary for salaried employees. However, income from other sources can be considered, such as capital gains, interest, or rental income.
• Age: There is no age limit defined for paid employees if a person is getting a pension or salary. It is considered as the salaried employees.
• Income Limit: Income is not the determining element for being classified as a salaried employee. However, there are income levels above which salaried employees could not be qualified for the Income Tax Return (ITR) forms. For instance, if total income does not exceed Rs 50 lakh, ITR-1 (Sahaj) is applicable.

Different Occupation under ITR for Salaried Employees

Here are the primary occupation classifications applicable to salaried employees:

1. Public Sector Employees: These are also known as PSUs. PSUs are government-owned bodies or managed public sector undertakings that receive allowances, salaries, and benefits, the same as government employees.
2. Private Sector Employees: Those who work under private organizations, entities, or corporations who have received fixed perks, benefits, salaries, and perks according to their employment contracts.
3. Government Employees: They get the salaries, benefits, and pensions according to government regulations such as local, state or central.
4. Bank Employees: Bank employees are from the banking sector and work in private, cooperative, public, and regional rural banks. They receive bonuses, salaries, and allowances.
5. Educational Employees: These are professors, teachers, administrative staff, and other employees working in an academic institute, as well as remuneration or salaries received from their services.

Need of ITR for Salaried Employees

There is a certain threshold that has been fixed for filing an ITR for salaried employees. As both old and new tax regimes have been set, an exemption if an individual's income is Rs. 2,50,000 for the financial year 2023-2024. However, as per the new tax regime, the exemption threshold increases to 3 Lakh for the financial year of 2024-2025.

It is noteworthy to mention that if you are in the category of a salaried employee, then the salaried employees only need to file the ITR for FY 2023-24 if their income is above Rs. 2,50,000.

Why Choose Bizfoc for ITR Filing?

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FAQs for ITR Filing for Salaried Employees