How to do income tax salary return filing for salaried person

income tax salary return filing

Income tax salary return filing is an easy task compared to other income tax returns, like income tax capital gains returns, and income tax business returns.  It takes only patience for the compilation of important data for income tax return filing for the salaried individual if you follow this simple step-by-step process.

Step 1 – Preparation of necessary salary data.

  • Determine the companies you have worked with – In case you have worked with more than one employer, in this case, you should have submitted the details of previous employment to your current employer during the end of the financial year along with any other additional deductions apart from previous employer form 16.
  • Reporting of income to the employer – Make sure all the income is reported to the employer, such as income from fixed deposits, and savings account interests. The critical part is that most salaried employees forget to declare any capital gain income, and it gives additional tax demand during the assessment.
  • Verify with Form 26AS available at the income tax department to make sure that all income found in Form 26AS is reported.
  • If the current employer does not consider the income from the previous employer, or other income, kindly consider it as per the provisions of the Income tax act.
  • Once all these processes are completed you should have data on gross salary, exemptions, deductions under chapter VIA, etc.
  • Workout tax using the new tax regime u/s 115BAC and old tax regime and use whichever ever beneficial.

Step 2 – Starting with the filing process on the Income tax website

  • Login to the Income tax E filing website 
  • Select FILE NOW and select the below options one by one.
  • Select assessment year 2021-2022 (Current AY) for the financial year 2020-2021
  • select online
  • select start new filing
  • select individual
  • select ITR 1 and proceed with ITR 1
  • select taxable income is more than the basic exemption limit

Step 3 – Entering data in ITR 1 form

  •  If you have filed the return earlier all personal data will be prefilled else click on edit and add personal details such as e-mail ID mobile no, address, etc.
  • Select nature of employment as other for PRIVATE sector companies.
  • If a return is filed within the due date select section 139(1) else select the relevant section only after careful analysis.
  • Add bank details.
  • Select YES or No for the new tax regime based on analysis in Step 1
  • Enter the details of the income
  • enter details of income tax deductions such as chapter VIA
  • check if there is any additional tax due apart from tax already paid by TDS, if there is additional tax due other than
  • proceed to preview the return and submit the return.

Submit the return with verify later option so that any delay in receiving Aadhaar OTP will not stop the filing process. Once the return is submitted successfully, E- Verify using the Aadhaar OTP option.

Step 3 – Tracking the return processing

once the return is submitted and e verified, the status will show as filed along with verified, wait for a few months normally 3 months until the processing is done by the department, nowadays processing of income tax return filing is done as quickly as 10 days and 143(1) notice is issued. Once 143(1) notice is issued with refund determination without any changes in income computation, you can sit quietly until a refund is received.

If there is any demand or refund after processing of income tax return filed, either you should accept the demand or file a new return in response to the notice providing correct information under the appropriate category.

Common problems in Salary income tax return filing

  1. Selection wrong assessment year
  2. Entering deductions in the wrong area
  3. Ignoring form 26AS data
  4. Selection of the wrong assessment year happens when the person files to consider the assessment year is the same as the financial year for simple understanding select assessment year = financial year + 1 so for the financial year 2020-2021 assessment year is 2021-2022
  5. Return is considered as complete only when payment of tax is completed and there is no tax liability, so please complete the payment before submitting the return