Income Tax return for the Salaried Taxpayer – Changes in the ITR Form
Income Tax Return (ITR) forms not only seeks information of the taxpayers as to income and tax but also seeks various other information and data. With an objective to control tax evasion & widening the tax base, new income tax return forms are notified every year with additional reporting requirements. It is expected that an automated scrutiny system will be enforced for data analysis & comparison of the same with other agencies. It’s time to know the correct return forms and the changes therein:
|ITR Forms||Applicable to|
|1||This is the simplest form of Income Tax return which for Resident Individual/HUF having income only from salary, One House Property, income under the head “Income from other source” can file the return in ITR-1 provided that
1. Total income doesn’t exceed Rs. 50 Lakh.
2. Such person is not a director or shareholder in an unlisted company
3. Agricultural income don’t exceed Rs. 5,000/-
4. Dividend income does not exceed Rs. 10 Lakh
5. No income is taxable u/s 115BBE
6. Such person have signing authority or assets located outside India
7. No relief u/s 90 or 90A.
|2||Individual/HUF having no business/professional income.|
|3||Individual/HUF having business & professional income.|
|4||Individual/HUF having business & professional income and opting for presumptive scheme of taxation U/s 44AD, 44ADA or 44AE. This form cannot be used if individuals is a director in a company or has invested in equity shares of unlisted company.|
|5||Firm, LLP, AOP, BOI, artificial juridical person, cooperative society or local authority. (A person who is required to file return in ITR 7 shall not use this form).|
|6||Company, other than a company claiming exemption u/s 11|
|7||Persons (including companies) who are required to furnish return u/s 139(4A), 139(4B), 139(4C) or 139(4D) (i.e., trusts, political parties, institutions, colleges, etc.)|
As can be seen from above, salaried taxpayers will have to file the ITR either in ITR – 1 or ITR – 2 as they will not be having any income under the head “Income from Business & Profession”. There are number of changes in the return filing requirements for salaried taxpayers. Here is a compilation of few of the changes in current ITR forms vis-a-vis last year’s ITR forms for salaried taxpayers:
- ITR-1 can be used by salaried taxpayer – Resident Individual/HUF having income only from salary, One House Property, income under the head “Income from other source” can file the return in ITR-1 subject to following conditions:
i. Total income doesn’t exceed Rs. 50 Lakh.
ii. Such person is not a director or shareholder in an unlisted company
iii. Agricultural income don’t exceed Rs. 5,000/-
iv. Dividend income does not exceed Rs. 10 Lakh
v. No income is taxable u/s 115BBE
vi. Such person have signing authority or assets located outside India
vii. No relief u/s 90 or 90A.
- ITR – 2 can be used by other salaried taxpayers who cannot file ITR-1.ITR- 1 is simplest form and so salaried taxpayer covered by above criteria of ITR – 1 should file the return in ITR-1.
- Form No. 16 i.e., Salary TDS certificate has now been revised to provide for more detailed information as to all tax-exempt allowances and deductions as available under the income tax law.
Part B to Form No. 16 has been aptly revised to give bifurcated details of all the exemptions and deductions allowed under the income tax law.
It must be noted that the deductor (i.e., employee) is also disclosing the same details at the time of filing their annual TDS return and Form No. 16 as discussed above is generated through system only which means that the same data is available with the income tax department. Needless to say, any mismatch in the data may invite taxmen notice.
More particularly, Taxpayers would have to fill in aggregate values of the broad components of salary like;
Profits in place of salary,
Complete break-up would need to be provided of all allowances exempt under section 10 like House rent allowance (HRA), Leave travel allowance (LTC), Gratuity,
Further, each of the deductions allowed under chapter VI-A from section 80C to 80U has to incorporated separately like;
– ELSS, NSC, Life insurance premium, tuition fees for children, and PPF investment U/s 80C,
– Medical insurance premium under section 80D
There won’t be any difficulty as all above required details are there in the Form No. 16 as referred above. If taxpayer is using online platform for filing ITR, above details can be automatically populated in ITR, by import from 26AS feature.
Similar to the filing of ITR-1, taxpayers filing ITR-2 would also need to provide complete details of all the exempt allowances and deductions. In addition, ITR-2 requires taxpayers to submit complete break-up of various components of salary furnishing the specified amounts falling under salary, perquisites, and profits in lieu of salary. This information can be obtained from the annexure with Form 16 provided by an employer.
As mentioned above, if the salary is received from more than 1 employer, then return cant b filed in ITR 12but has to be filed In ITR-2.
Taxpayers, in such cases, have to provide employer-wise details in case of salary received from more than one employer in a financial year.
Step-by-step guide for filing income tax returns online
With new income tax return forms now notified, here is a step-by-step guide for filing income tax returns. Income tax return filing may seem like a big deal for the beginners. However, following sequential steps would make the task easy. July 31st is the last date for filing income-tax return for salaried assessee.
- Preparing statement of income:
First & foremost, assessee should prepare the statement of income by incorporating all the income including FD/SB Interest, exempt income details, capital gain, salary/rental income, loss brought forward & carried forward, investment eligible for deduction etc. Once income statement is ready, taxpayer should compute the tax & if there is any balance tax liability after considering TDS/advance tax paid, then pay it along with interest, if any. One should verify the tax details by downloading Form No. 26AS from incometaxindia.gov.in which shows all the details like TDS & other taxes paid in the relevant year.
- Select correct ITR forms for filing:
Before filing, taxpayer should ascertain the correct ITR forms in which return has to be filed. Make sure that the correct form is chosen for filing. If the wrong form is selected, it will be considered as a failure to file returns by the IT department. For salaried taxpayer & other taxpayers who don’t have any business income, ITR-1 or 2 is applicable.
Procedure for filing the returns:
I] Whether to file online or physically?:
Now, most of the returns are required to be filed online in electronic mode only and the paper filing is restricted in following two cases only.
- Very Senior Citizens of the age of 80 years or more at any time during the previous year.
- Individual/HUF filing ITR 1/ ITR 4 not having a refund claim in the return & total income is not more than Rs. 5,00,000
II] Procedure for paper filing:
One can take the printout of the ITR form from the above mentioned website. After filling all the relevant details like personal information, income details, tax deposit details in the hard copy, one can sign & submit the same with the jurisdictional assessing officer. The receiving office at the income tax office will stamp your acknowledgement and give a copy back to you. Assessee is not require to submit any other supporting documents with the tax return. Taxpayer may check the tax jurisdiction by logging at the above quoted income-tax department website.
III] Procedure for filing return online:
a] The online filing process starts by clicking the ‘register’ link at income-tax e-filing website incometaxindiaefiling.gov.in. For registration, one has to provide personal details like PAN, name as per the PAN card, father’s name, date of birth, email address and contact number. The website provides required flow to complete the registration process.
b] Download the applicable return preparation form from the website and fill in the personal information and income-related details in the downloaded form. To ensure that all columns in the return form are file in properly, there is a process to validate the information by clicking on the ‘validate’ button on the last sheet.
c] On successful validation, access the ‘generate XML’ link in the tax return software and save the generated XML file. It is the XML file which is upload on the e-filing website. An acknowledgement form in ITR-V is generate on successful e-filing.
d] If the return is filed without using digital signature & without mentioning aadhar card, taxpayer would be required to take the print out of ITR-V, sign it in blue ink and dispatch it by ordinary/speed post to the Central Processing Centre (CPC), Bangalore within 120 days of uploading the return. On receipt of the signed ITR-V, tax department will send an email acknowledging the receipt of the ITR-V at the email id mentioned in the return form. There is no need to send ITR-V in the local office of the income-tax department. It may be noted that ITR-V is a password protected document & the password is PAN and date of birth in small case in continuation. [Using aadhar number is optional as of now. The government has come up with an idea of dispensing with the formality of forwarding the duly signed ITR-V form to CPC, Bengaluru, if the taxpayer provides with the Aadhaar number at the time of filing].