How do you file IT Returns for a Salaried Employee? (FY 2020-21)
An overview - how to fill ITR online for salaried employees?
The year 2020 has been fraught with uncertainty. While most income tax filing deadlines fall in the month of July each year, the Indian government has extended the deadline for filing income tax returns for 2021. If you work in the private or public sector and are subject to income tax, it is critical that you understand how to file for income tax returns for salaried employees.
How to file an income tax return online for salaried employees?
Determine your principal source of income to begin the procedure. Salary should be the principal source of revenue for salaried employee in this instance. The ITR-1 or the SAHAJ form can be used to file income tax returns online for all of these people. Please make sure you are registered on the e-filing website and have accurately updated your PAN and Aadhaar number there before proceeding. Please ensure that your phone number is linked to your Aadhaar card for the best results; this will come in handy for e-verification in the final round.
You must also link your bank account to this site; if you are due a refund from the IT department after filing your ITR, the funds will be sent into this account. The SAHAJ form this year comes with some new columns and schedules.
• The ITR-1 is a type of tax return.
The ITR-1 form will be pre-populated with the majority of the information requested. You'll note, for example, that information about your profile, pay, and TDS is already available. However, the information must be double-checked by the income tax payer before the return is submitted.
A more precise wage break-up in the ITR-1 form will be required from this assessment year as well. Allowances and other information of perquisites are exempt under Section 10 and must be mentioned here.
Even if you are a paid employee, if you have other sources of income, such as rent from a property or interest from bank deposits and savings bank accounts, you must include these facts in the form.
• Components of Salary
In the ITR-1 form, you must provide all of the components of your salary package. This includes any common deductions that help you reduce your overall tax bill. Employees who receive a salary as their principal source of income must report the total value of perquisites, exempt allowances, profit in lieu of salary, and any additional deductions as part of their entertainment allowance and professional tax.
• Household earnings
Even if you are a salaried employee, your tax returns will take into account rental revenue. The Indian government permits for the self-occupation of up to two homes. If you possess more than two properties, the rest will be classified as "deemed to be let out." You'll have to pay taxes on the rent (or potential rent) you get from these properties.
• Gains on Investments
Income tax guidelines compel the property owner to deduct TDS at a rate of 1% if the property's worth exceeds Rs. 50 lakhs. However, the ITR form has been amended to require the seller to provide these facts.
If the buyer's PAN is quoted or if tax is deducted by the buyer, it is required to provide this information to the buyer. The buyer's name and PAN, as well as the property address, percentage share, and amount, must be stated in the form.
• Other Sources of Income
Other sources of income will need to be fully disclosed. These include interest income, bank savings account income, fixed deposit income, and income-tax refunds that fall under the income-tax heading "other sources."
• Status of Residence
If your job requires you to travel internationally on a regular basis, you will be required to give information on the number of days you have spent abroad. Only if you spend a total of 182 days or fewer in the country in a given financial year, or 60 days or more in a financial year and 365 days or more in the preceding four financial years, will you be subject to income tax.
• Foreign Investments
If you have any overseas assets, such as foreign depository accounts, in addition to foreign bank accounts, you must declare them on your ITR-1 form. Other assets, such as overseas custodial accounts, foreign stock and debt held, and foreign cash value insurance contract details, will be required to be stated on income tax forms.
Every individual who earns more than Rs. 2.50 lakhs per annum is required to file an income tax return. You can know the income tax you need to file using an income tax calculator.IT Returns are important documents to have on hand when applying for a personal loan for salaried employees.
Disclaimer: Readers are suggested to seek independent professional advice from tax consultants on applicable income-tax provisions before making any investment and/or tax filing related decisions.
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