What is ITR?
Income Tax Return(ITR) is a form for filing taxpayers' info about their Income earned and tax pertinent to the income tax department. The Income Tax Act 1961 administers every ITR form and process.
The department has informed seven forms - ITR-1, ITR-2, ITR-3, ITR-4, ITR-5, ITR-6, and ITR-7.
Each taxpayer must do itr filing before the particular due date. The pertinence of ITR forms relies on the income sources of the taxpayer, the amount of earning Income, and the taxpayer's group, such as HUF, individuals, companies, etc. Here, in this article we will discuss in detail about the itr form for salaried employees.
Why must you file ITR?
It is obligatory to do ITR filing if any of the below-stated conditions apply to you:
1. If your gross yearly Income is more than the essential exemption limit as mentioned below:
Specifications Amount
For individuals below 60 years 2.5 lakh INR
For individuals above 60 years but below 80 years 3.0 lakh INR
For individuals above 80 years 5.0 lakh INR
2. If you are willing to assert an income tax refund from the department.
3. If you have invested in foreign benefits or earned them during the financial year.
4. If you aspire to apply for a loan or a visa
5. If the taxpayer is a firm, regardless of profit or loss.
Why is itr for salaried employees important?
This query is probably the most common for how is the online income tax return for employees. Thus, let's broaden our horizons on the reasons behind itr for salaried people.
1. Regulation of capital gains and losses
Filing an online income tax return is apt for you if you are willing to invest in the equity market and purchase or sell sales. However, the short-term assets losses can be extended up to eight years when you do the itr filing for a specific financial year.
2. Assert tax refunds
After the tax deduction, you can obtain tax refunds by giving your IT return for the financial year. Hence, refunds on fixed deposits or rent payments instigate after itr filing and maintaining your required tax deduction.
3. Suitable loan application
An itr filing is more than just a financial statement as it sheds light on your yearly earnings. NBFCs and banks generally need copies of ITRs for rendering loans like vehicle loans or home loans. Besides, online income tax return filing amplifies the opportunities for loan approval compared to a person with a similar income without ITRs.
4. Processing of visa
During the visa interview, many foreign consulate generals need you to give your ITR receipt of the previous years. Perceiving these documents implies that the person has adequate revenue income in India, which reinforces his candidature for visa approval.
ITR form for salaried employees
1. ITR-1 (Sahaj):
If you fulfil the below conditions, then the ITR-1 form applies to you:
- Salaried employees with an annual income of 50 lakhs INR and not more than that.
- The total Income comprises earnings from other sources like one house property, interest income, dividend, etc., and agricultural Income of not more than 5000 INR.
- An individual should be an Indian citizen.
- Nevertheless, if a salaried person has Income from foreign Income, capital gains, etc., or is a non-resident, then he cannot do itr filing using ITR-1.
2. ITR-2:
If you meet the below conditions, then the itr form for salaried employees is itr-2:
- Is the company's director
- Is having an investment in non-listed equity shares
- Has revenue from salaries, capital gains, more than one house property, foreign returns, and other income sources but not from profits from profession or business.
- It holds assets outside India.
- Total Income surpasses 50 lakh INR
- Hindu Undivided Family (HUF)
- Should be a resident or non-resident person.
- If there are losses that can be pushed off under 'Income from house property.
3. ITR-3:
To satisfy the stipulations, the itr form for salaried employees is itr-3
- Income from a business or profession under a proprietorship firm, in which the taxpayer is a proprietor for audit and non-audit cases.
- Income received from one or several house properties
- Rewards received by horse racing, winning a lottery, and other activities coming in the category of 'Income from Other Sources.
- Income assets earned outside India
- Income from long-term or short-term capital profits.
The Final Takeaway
It is significant to ensure that itr for salaried employees is done using the proper form. If you file ITR using the wrong tax return form, it will cause the faulty filing of itr form for salary income.
The tax department will give you a tax notice to conduct itr filing using the proper form. Moreover, the form you will file ITR is based on your source income and other conditions, as stated above.
In case you are stuck on how to proceed with "itr form for salaried employees", then you must seek help from Lawgical India. Our team of experts will effortlessly conduct the entire process.
