ITR FOR SALARIED PERSON
BASIC PLAN
FILE ITR FOR SALARIED PERSON:
o If you are an employee, and your annual income falls above the exemption limit, then it is mandatory to file income tax return.
o As of 2021, this exemption limit, as per the old as well as new tax regime, is Rs 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.
o ITR-1 can be filed by a Resident Individual whose:
a) Total income does not exceed Rs 50 lakh during the Financial Year.
b) Income is from salary, one house property, family pension income, agricultural income (up to Rs. 5000/-), and other sources.
o ITR-2 can be filed by individuals or HUFs whose:
a) Income is more than Rs 50 Lakhs per annum.
b) Income is from salary, Two or more house rent, family pension income, agricultural income (more than Rs. 5000/-), Individual Director in a Company and other sources.
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ITR FOR SALARIED PERSON
STANDARD PLAN
ITR-1 RETURN FILING FOR:
» Rental Income from One House property.
» Other sources of Income (Interest).
Rs 599/-
ITR FOR SALARIED PERSON
PREMIUM PLAN
ITR-1 RETURN FILING FOR:
» Rental Income from One House property.
» Other sources of Income (Interest).
Rs 1,499/-
ITR FOR SALARIED PERSON
BASIC PLAN
ITR-2 RETURN FILING FOR:
- Income tax return filing for persons with single or multiple Form 16 with Salary more than Rs 50 Lacs.
- Dividend Income of more than Rs 10 Lacs.
- Rental Income More than One House property.
Rs 1,999/-
ITR FOR SALARIED PERSON
STANDARD PLAN
ITR-2 RETURN FILING FOR:
- Income tax return filing for persons having capital gains (mutual funds and stocks), ESOP (Employee Stock Ownership Plan), FD, Interest or salary arrears.
- E filing of form 10e.
- Rental Income More than One House property.
Rs 2,499/-
ITR FOR SALARIED PERSON
PREMIUM PLAN
ITR-2 RETURN FILING FOR:
- Income tax return filing for persons having Foreign Income (On-site deputation), Foreign Assets, NRI.
- Rental Income More than One House Property.
Rs 4,999/-
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FILE ITR FOR SALARIED PERSON
WHAT IS INCOME FROM SALARY ?
Salary is the compensation given by an employer for the services rendered by the employee for a specific period. It is paid in fixed cycles, For example – monthly.
- Total income from salary include:
- Basic salary or fixed components as per the term of employment.
- Fees, bonus, the commission received by the employee.
- Allowance paid by the employer for meeting personal expenses.
2. Fully Taxable allowances of income from salary:
- Dearness allowance paid by the employer to meet inflation expenses.
- City compensatory compensation paid by the employer to move around cities.
- Overtime allowance paid by the employer.
- Deputation allowance.
- Servant allowance.
3. Partly taxable allowance – income tax for salaried:
- House rent allowance (HRA).
- Entertainment allowance – except for state or central employees.
- Special allowance like travel, uniform, research.
- Special allowance like children’s education allowance.
4. Fully exempt allowance – income tax for salaried:
- Foreign allowance for employees posted abroad.
- Compensation of supreme court or high court judges.
- United Nations Organization employee allowance.
5. Privileges of income tax for salaried:
- Rent-free accommodation.
- Concession in rent.
- Interest-free loans.
- Club fee payments.
- Movable assets.
- Educational expenses.
- Insurance premium paid on behalf of employees.
The fringe income tax for salaried:
- Medical benefits.
- Health insurance premium.
- Leave travel concession.
- Laptop, car for personal use.
- Staff welfare scheme.
ITR APLICABILITY FOR SALARIED PERSON
WHO IS ELIGIBLE TO FILE ITR-1 SAHAJ FORM.
ITR-1 Form is a simplified one-page form for individuals having income up to Rs 50 lakh from the following sources :
- Income from Salary/Pension
- Income from One House Property (excluding cases where loss is brought forward from previous years)
- Income from Other Sources (excluding winning from Lottery and Income from Race Horses).
- Agricultural income (Upto to Rs. 5000)
In the case of clubbed Income Tax Returns, where a spouse or a minor is included, this can be done only if their income is limited to the above specifications.
WHO CANNOT FILE ITR-1 SAHAJ FORM
- An individual having an income above Rs 50 lakh cannot use this form.
- An individual who is either a director in a company and has held any unlisted equity shares at any time during the financial year cannot use this form.
- Residents not ordinarily resident (RNOR) and non-residents cannot file returns using ITR-1
- Also, individuals who have earned income through the following means are not eligible to file form ITR-1 :
- More than one House Property
- Lottery, Racehorses, Legal Gambling, etc.
- Taxable capital gains (Short term and Long term)
- Agricultural income exceeding Rs. 5,000
- Business and Profession
- Individual who is a Resident and has assets (including financial interest in any entity) outside India or signing authority in any account located outside India.
- Individual claiming relief of foreign tax paid or double taxation relief under section 90/90A/91.
WHO IS ELIGIBLE TO FILE ITR-2 FORM.
ITR Form 2 is for Individuals and HUF having income more than 50 lakhs from the following sources:
- Income from Salary/Pension
- Income from House Property(Income can be from more than one house property)
- Income from Capital Gains/loss on sale of investments/property (Both Short Term and Long Term)
- Income from Other Sources (including winning from Lottery, bets on Race Horses and other legal means of gambling)
- Foreign Assets/Foreign Income
- Agricultural Income more than Rs 5000
- Resident not ordinarily resident and an NRI.
A Director of any company and an individual who is invested in unlisted equity shares of a company will be required to file their returns in ITR-2.
WHO CANNOT FILE ITR-2 FORM.
- Any individual or HUF having income from Business or Profession
- Individuals who are eligible to fill out the ITR-1 Form.
- Individuals who are partners in a Partnership Firm.
INCOME TAX RATE
INCOME TAX RATE UNDER EXISTING TAX REGIME AND THE NEW TAX REGIME (FOR TDS RETURN FILING)
- The taxpayers now have an option to choose between the old and the new tax regimes.
- The decision of opting for a tax regime has to be taken at the beginning of the financial year.
| Taxable Income | Income Tax Rate |
|---|---|
| Upto INR 2,50,000 | Nil |
| INR 2,50,000 - INR 5,00,000 | 5% |
| INR 5,00,000 - INR 10,00,000 | 20% |
| Above INR 10,00,000 | 30% |
| Taxable Income | Income Tax Rate |
|---|---|
| Upto INR 3,00,000 | Nil |
| INR 3,00,000 - INR 5,00,000 | 5% |
| INR 5,00,000 - INR 10,00,000 | 20% |
| Above INR 10,00,000 | 30% |
| Taxable Income | Income Tax Rate |
|---|---|
| Upto INR 5,00,000 | Nil |
| INR 5,00,000 - INR 10,00,000 | 20% |
| Above INR 10,00,000 | 30% |
The new tax regime is where the taxpayer has an option to choose either to pay taxes at a lower interest rate as per the New Tax Regime on the condition that they forgo certain permissible exemptions and deductions that are available the income tax.
or
The taxpayer can continue paying taxes under the existing tax rates. The assesses can avail of the rebates and the exemption by staying in the old regime and pay taxes at the existing high rates.
| Taxable Income | Income Tax Rate (Applicable for all individuals and HUF) |
|---|---|
| Upto INR 2,50,000 | Nil |
| INR 2,50,000 - INR 3,00,000 | 5% (Tax rebate u/s 87 is available) |
| INR 3,00,000 - INR 5,00,000 | 5% (Tax rebate u/s 87 is available) |
| INR 5,00,000 - INR 7,50,000 | 10% |
| INR 7,50,000 - INR 10,00,000 | 15% |
| INR 10,00,000 - INR 12,50,000 | 20% |
| INR 12,50,000 - INR 15,00,000 | 25% |
| More than INR 15,00,000 | 30% |
- NOTE:
- The tax rates in the New Tax regime are the same for all categories of individuals.
- Hence, there is no increased basic exemption limit benefit that will be available to the senior and the super senior citizens in the New Tax Regime.
- Individuals with Net Taxable Income less than or equal to Rs 5 lakh will be eligible for the tax rebate u/s 87 A the tax liability will be Nil for such individuals in both New and Old existing tax regimes.
- The exemption limit for NRIs is Rs. 2.5 lakh irrespective of age.
- Additional health and education cess at the rate of 4% will be added to the Income-tax liability in all cases (Increased from 3% since FY 2018-19)
- An applicable surcharge as per tax rates below in all categories mentioned above:
- 10% of the income tax if total income > Rs. 50 lakh.
- 15% of the income tax if the total income > Rs.1 crore
- 25% of the income tax if the total income > Rs.2 crore.
- 37% of the income tax is the total income > Rs.5 crore.
The taxpayer opting for concessional rates in the new tax regimes has to forgo the exemptions and the deduction that is available under the old tax regime.
The list of common exemptions and deductions that are not allowed in the new Income tax regime are:
The taxpayer opting for concessional rates in the new tax regimes has to forgo the exemptions and the deduction that is available under the old tax regime.
The list of common exemptions and deductions that are not allowed in the new Income tax regime are:
The following changes are incorporated in the ITR Form:
FREQUENTLY ASKED QUESTION - FAQ.
I have been employed by 2 employers during the same year. Can I claim a basic exemption of 2.5 lakhs against each of the salary incomes?
- Such basic exemption of Rs 2.5 lakhs is for your overall income for the year.
- You cannot claim this against various incomes separately.
- Therefore, you must sum up all your income during the year including the salary income from both your employers and then claim a basic exemption of Rs 2.5 lakhs from such income.
Does salary include all kinds of pension?
- The definition of salary includes pension. However, pension is what is payable by an employer or previous employer to an employee. Where a pension policy is covered under a contract of employment i.e., say an employer bought it, then also it is taxed under salary.
- However, pension paid out of any policy with a life insurance company cannot be taxed as salary and will be taxable under the head “Other source”.
Are arrears of salary taxable?
Yes. arrears of salary are taxable. However, one can claim relief under Section 89 in this regard.
I have losses in selling house property. Also, I have incurred losses in business. Can I set of such losses against my salary income?
- Losses from house property can be set off against salary income.
- However, business losses are not allowed to be set off against business income.
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