Filing of the Income-tax return for salaried individuals is mandatory even though the declaration had been given to the employer, the declaration is used by the employer for TDS compliance and generation of Form-16, filing of income-tax returns is mandatory for all individuals if his/her income exceeds the basic exemption limit before the due date. If TDS deducted is in excess of the tax payable, then a refund can be claimed only by filing.
What is Income tax salary return filing?
The major part of the Income-tax revenue comes from the salaried class of individuals, income tax act is very simple and straight forward in assessing income from the head salary. Form 16 submitted by the individual contains all information regarding salary income and other details that were submitted in the declaration provided to the employer. Even though all details are in Form 16 there will be some case where it is required for expert service for income tax salary return filing. And also for privacy purpose all employees may not declare all income in their annual declaration to employer, in such case it requires service of income tax return filing consultant for income tax return filing.
How to file income tax returns for salary income?
Salary income tax returns are filed in ITR form 1 or 2 based on the amount of income and no of house property. Information in Form-16 will be sued along with other information that is not available in Form-16. After compiling the information on income tax computation under different heads of income, deductions available shall be arrived at, for determining final tax liability or refund. Calculation of income tax with the presence of other income is a bit knowledge-oriented and requires a deep understanding of the income tax act, so income tax filing by an income tax consultant would be the right choice in that case due to professional knowledge and experience.
What are the details required for income tax filing for the salaried persons?
- Form 16 issued by all employers.
- Housing loan certificate issued by the bank.
- Details of other income are not reported in form 16.
- User ID and password of income tax e-filing portal.
- Filled up checklist.
Steps to Register
Review of TIS and AIS
Preperation of income tax filing data
Updating correction if required
Filing of income tax return
Important points on income tax return filing for salaried individual
- AIS and TIS review is important in the process of income tax return filing, taxpayer would have forgotten about any other income, sale of shares, or fixed deposit, which may not have been reported in Form 16.
- Additional tax if any due to the presence of additional income may result in payment of interest under sections 234B and 234C for non-payment of advance tax or deferment of advance tax.
- Income from other heads of income should be taken care of with the highest level of due diligence, for e.g.: there may be capital gains on the sale of property below Rs.50,00,000 which was not reported by the taxpayer or AIS in such case it may result in high tax liability with interest at a later stage after it was found out by income tax department. We consider getting complete information as our primary task before proceeding to the income tax filing process.
- Ensure active and correct banks account details are provided for refund, with the latest amendment in income tax rules only bank accounts linked with a PAN number can be used for an income tax refund.
- Processing of refunds is an automated process, and we have seen refunds being processed in less than a day in some cases, there is no requirement to submit any request for refund processing, the only requirement for refund processing is ITR should be verified either through e-verification or by sending signed acknowledgment in post.
- There is a myth that an income tax return is not required to be filed if the declaration is provided to the employer for the generation of FORM-16, it is the compliance activity undertaken by the duties of the employer under the income tax act
- Visa processing requires income tax papers, so it is suggested to file income tax returns regularly employee, even in case income is less than the basic exemption limit.
- Filing of income tax returns enable good credit rating even for employee, apart from salary slip, and bank statement, income tax returns are required to be filed for maximum loan eligibility, and lower interest rate. Some nationalized bank requires a minimum of 3 years of income tax filing documents for processing loan applications.
- In case there is a loss in income from house property, and it is not absorbed completely in the current financial year, then carry forward of current year loss is possible only by filing the income tax return.