ITR Filing for Salaried Employees (above 50 lakh)

There are a lot of reasons why you must always file income tax returns:

• To abide by the law.
• To prevent any potential legal issues.
• The extra tax paid can be refunded in the following fiscal year by submitting an ITR.
• ITR is recorded with the government and acts as a legal proof of income and identity, which is crucial to submit while applying for loans.
• ITR filing boosts your credit score.
• Sections 70 and 71 of The Income-tax Act 1961 contain some provisions for carrying forward losses of a particular year to the subsequent year which means you can move your loss to the next assessment year.

TDS or Tax Deducted at Source is the tax that your employer deducts from your salary every month and pays to the Income Tax Department on your behalf.  Subsequently, your employer determines the amount of TDS that has to be deducted from your salary every month based on your total salary for the whole year and your investments in tax-saving products.

TDS forms a major portion of every salaried employee's income tax payment. Your employer will share a TDS certificate with you called Form 16, typically around June or July, showing the details of the tax deducted each month.

As mentioned in the previous question, your employer has to deduct TDS from your salary and deposit it with the government, as required by the Income Tax Department.

The Form 16 certificate contains details of the salary you’ve earned during the year and the total TDS amount deducted. It has 2 parts, Part A contains the details of the employer and employee name, address, PAN & TAN details, and TDS deductions. Part B contains the details of salary paid, other incomes, deductions allowed, and tax payable.

Form 26AS includes a summary of taxes deducted on your behalf and taxes paid by you, as provided by the Income Tax Department. It will show you the details of tax deducted on your behalf by deductors, details of tax deposited by taxpayers, and the tax refund you’ve received in the financial year. You can access this form from the website of the Income Tax Department

You are eligible to file ITR-2 if you are an individual or HUF who:

• Are not eligible to file ITR-1 (Sahaj)
• Do not have income from profit and gains of business or profession and also do not have income from profits and gains of business or profession in the nature of:
  • Interest
  • Salary
  • Bonus
  • commission or remuneration, by whatever name called, due to, or received by you from a partnership firm
• Have the income of another person like spouse, minor child, etc., to be clubbed with your income – if income to be clubbed falls in any of the above categories.

ITR-2 cannot be filed by any individual or HUF, whose total income for the year includes income from profit and gains from business or profession, and also who has income in the nature of:

• Interest 
• Salary
• Bonus
• commission or remuneration, by whatever name called, due to, or received by him from a partnership firm.

• In case you have salary income, you need Form 16 issued by your employer.
• If you have earned interest on fixed deposits or savings bank account and TDS has been deducted on the same, you need TDS certificates, that is, Form 16A issued by Deductors.
• You will need Form 26AS to verify TDS on salary as well as TDS other than salary. You can download Form 26AS from the e-Filing portal.
• If you are living in rented premises, you need rent payment receipts for the calculation of HRA (if you have not submitted the same to your employer).
• If you have any capital gains transactions in shares, you will need a summary or profit / loss statement of capital gain transactions of shares or securities during a year, if any, for computation of capital gain.
• You will need your bank passbook and Fixed Deposit Receipts (FDRs) to calculate the amount of interest income.
• If you have received rent from your rented house property, then you will need your tenant / local tax payment / interest on borrowed capital details (if any) to calculate income from the house property.
• In case you want to claim any loss incurred during the current year, then you will need the relevant documents exhibiting the loss.
• In case you wish to claim previous year’s loss, you will need a copy of ITR-V pertaining to the previous year, disclosing the said loss. 
• You will also need documents or proofs for claiming tax saving deductions u/s 80C, 80D, 80G, 80GG such as life and health insurance receipts, donation receipts, rent receipts, receipts for tuition fees etc., if the same were not considered in your Form 16.

Yes, you can revise your income tax return within 1 year from the end of the relevant assessment year or before the completion of the assessment year, whichever is earlier. We urge you to provide full and accurate details to avoid the need for any change or rectification in the initially filed return. Note: Filing for revised returns is not included in this plan.

There are different penalties associated with filing your Income Tax Returns (ITR) late or skipping the filing entirely. Some of the sections and their penalties include:

Provision	Nature of offense	Penalties Consequences
Section 234F	Penalty For Late Filing	Penalty Up To INR 5000/-
Section 234A, 234B, And 234C	Interest On Late Payment	1% Every Month On The Outstanding Amount From The Due Date To The Payment Date.
Section 271F	Disallowance Of Deductions	Lead To Disqualification Under The Income Tax Act For Several Deductions.
Section 276CC	Prosecution And Imprisonment For Violating Income Tax Regulations	6 Months To 7 Years Imprisonment And A Fine.

It is important to note that these fines and penalties could change at any time, so it's always preferable to file your ITR before the deadline to avoid paying any fees or penalties. There are three categories for those who are salaried to take into account:

• Annual total income under INR 2.5 lakhs: You can file a nil return without incurring any penalty.
• Annual total income under INR 5 lakhs: The maximum fine for filing the ITR late or not at all is INR 1,000/-.
• Annual total income over INR 5 lakhs: The fine for filing an ITR late or not at all is up to INR 10,000/-.

To avoid issues in your ITR filing and getting your refund, make sure you do the following:

• Link Aadhaar and PAN.
• Pre-validate your bank account where you want to receive your refund.
• Choose the correct ITR before filing or else the filed return will be treated as defective and you will need to file a revised ITR using the correct form.
• File the return within the specified timelines.
• Verify your return and you can opt for e-Verification (recommended option – e-Verify Now) since it’s the easiest way to verify your ITR.
• File the responses for the notices received from the ITD within the specified timelines.

Note: At FirstFiling, our team of professionals will help ensure that you meet all these guidelines and there are no issues in your ITR filing.