Step-by-Step Guide to Filing Income Tax Returns for Salaried Individuals in India

Filing your income tax return can feel like a complex task, but it’s a crucial responsibility for every earning citizen in India. For salaried individuals, it’s not just about following the law; timely and accurate filing of income tax returns for salaried individuals unlocks benefits like getting tax refunds faster, building a strong financial record for loan or visa applications, and avoiding unnecessary penalties. Think of your Income Tax Return (ITR) as your annual financial report card to the government, summarizing the income you earned and the taxes you paid during a financial year (April 1st to March 31st).

Understanding why filing income tax returns in India is important is the first step. It allows you to claim legitimate tax deductions and exemptions, potentially leading to a refund if excess tax was deducted by your employer (TDS). It also serves as vital proof of income. Feeling overwhelmed? Don’t worry. This post provides a detailed, easy-to-follow step-by-step guide to filing income tax returns for salaried individuals in India, making the process smoother and clearer for you.

Understanding the Basics of Income Tax Returns for Salaried Individuals

Before diving into the actual filing process, let’s cover some essential basics. Knowing these prerequisites and key concepts will help you navigate the income tax return process for employees in India more confidently.

Why is Filing ITR Mandatory for Salaried Employees?

You are generally required to file an income tax return if your Gross Total Income (before claiming deductions under Chapter VI-A like Section 80C, 80D etc.) exceeds the basic exemption limit set by the Income Tax Department for the financial year. These limits vary based on age.

However, filing might be mandatory even if your income is below the exemption limit in certain situations:

• You need to claim a tax refund.
• You have assets or financial interests outside India.
• You have deposited a large amount in your bank accounts (limits specified by the IT department).
• You have incurred significant expenditure on foreign travel or electricity consumption (limits specified).
• You need proof of income for loans (home loan, vehicle loan) or visa applications.

Filing voluntarily, even if not mandatory, is always a good practice for maintaining a clean financial record.

Key Documents Required for the Income Tax Return Process for Employees in India

Having the right documents handy makes the filing process much smoother. Here’s a checklist for salaried individuals:

• PAN Card: Your Permanent Account Number is essential.
• Aadhaar Card: Ensure your Aadhaar is linked with your PAN. This is mandatory for filing ITR.
• Form 16: This certificate is issued by your employer. It details your salary, deductions claimed through the employer, and Tax Deducted at Source (TDS).
• Salary Slips: Useful for cross-verifying details with Form 16, especially regarding allowances.
• Bank Account Statements: Required to report interest income earned from savings accounts and fixed deposits. Also needed for cross-verification with Form 26AS and AIS.
• Form 26AS & Annual Information Statement (AIS)/Taxpayer Information Summary (TIS): These are crucial. Download them from the Income Tax e-filing portal. Form 26AS shows TDS deducted, advance tax paid, etc. AIS/TIS provides a comprehensive view of your financial transactions reported to the IT department by various entities (banks, mutual funds, etc.).
• Proofs for Claiming Deductions: Keep investment proofs ready if you plan to claim deductions not already considered by your employer in Form 16. Examples include:
• Section 80C: Receipts for ELSS, PPF, Life Insurance Premium, NSC, Tuition Fees, Home Loan Principal repayment.
• Section 80D: Receipts for Medical Insurance Premiums paid for self, family, and parents.
• HRA Exemption: Rent receipts and rent agreement (if claiming House Rent Allowance exemption and not fully captured by the employer).
• Home Loan: Statement from the bank showing interest and principal repayment details (for Section 24(b) and 80C).
• Details of Other Income: Information on any income earned besides salary, like interest from savings/FDs, dividend income, etc. (Note: ITR-1 has limitations on the types of other income).

Gathering these documents beforehand streamlines the income tax return process for employees in India.

Decoding Your Form 16

Form 16 is perhaps the most important document for salaried taxpayers. It typically has two parts:

• Part A: Contains details of the employer (Name, Address, TAN, PAN) and employee (Name, Address, PAN), along with a summary of tax deducted and deposited quarterly by the employer. It’s generated by the TRACES portal.
• Part B: This is an annexure prepared by the employer. It provides a detailed breakup of your salary, including allowances (like HRA, LTA), perquisites, profits in lieu of salary, deductions allowed under Chapter VI-A (like 80C, 80D claimed via employer), and calculates your net taxable income and tax thereon.

Carefully review both parts of your Form 16 to ensure accuracy before you start filing your return.

Choosing the Right ITR Form: A Quick Guide to Income Tax Returns India

Selecting the correct ITR form is critical. For most salaried individuals, ITR-1 (Sahaj) is the applicable form. Here’s who can use ITR-1:

• You must be a Resident Individual.
• Your Total Income must be up to ₹50 lakh during the financial year.
• Your income sources must be limited to:
• Salary or Pension
• Income from One House Property (excluding cases where loss is brought forward from previous years)
• Income from Other Sources (like savings account interest, FD interest, family pension, etc. – excluding lottery/racehorse winnings)
• Agricultural Income up to ₹5,000.

You cannot use ITR-1 if:

• You are a Director in any company.
• You have held unlisted equity shares at any time during the financial year.
• You have income from Business or Profession.
• You have income from Capital Gains.
• You have income from more than one House Property.
• You have foreign assets or foreign income.
• Your agricultural income exceeds ₹5,000.
• You are claiming relief under Section 90/90A/91 for foreign tax paid.

If you fall into any of the exclusion categories, you might need to file ITR-2 (for capital gains, multiple house properties, foreign assets/income, but no business income), ITR-3 (for business/profession income), or ITR-4 (Sugam – for presumptive income). This guide to income tax returns India focuses primarily on ITR-1, suitable for the majority of salaried employees.

Old vs. New Tax Regime: Which One Should Salaried Individuals Choose?

India offers two tax regimes for individuals:

• Old Tax Regime: Allows you to claim various deductions and exemptions like HRA, LTA, standard deduction, deductions under Section 80C (up to ₹1.5 lakh), 80D (health insurance), 80TTA (savings interest), home loan interest (Section 24b), etc. Tax slabs are generally higher compared to the new regime.
• New Tax Regime (Default Regime from FY 2023-24 onwards): Offers lower, concessional tax slab rates but disallows most common deductions and exemptions (around 70 of them). A standard deduction of ₹50,000 for salaried individuals and deduction for employer’s contribution to NPS (Section 80CCD(2)) are notable exceptions allowed under the new regime.

Salaried individuals (without business income) have the flexibility to choose between the old and new tax regimes each financial year based on which one is more beneficial. It’s wise to calculate your tax liability under both regimes before filing. You can use the Income Tax Department’s official calculator for comparison: Income Tax Calculator on incometax.gov.in.

Step-by-Step ITR Filing India: The Online Process via the e-Filing Portal

The Income Tax Department’s e-filing portal provides a convenient way to file your return online. Here’s a breakdown of the step-by-step ITR filing India process:

Step 1: Registering or Logging into the Income Tax e-Filing Portal

• Visit the official Income Tax e-filing portal: https://www.incometax.gov.in/
• If you are a first-time user, click on ‘Register’ and complete the registration process using your PAN.
• If you are already registered, click ‘Login’. Your User ID is typically your PAN. Enter your password and log in.

Step 2: Accessing and Verifying Form 26AS and AIS/TIS

Before starting the filing process:

• Go to ‘e-File’ -> ‘Income Tax Returns’ -> ‘View Form 26AS’. You will be redirected to the TRACES website to view/download it. Verify the TDS amounts shown here match the details in your Form 16.
• Go to ‘Services’ -> ‘Annual Information Statement (AIS)’. Here you can view both AIS (detailed statement) and TIS (summary). Carefully check all the financial transactions reported, such as salary received, interest credited, dividends, sale/purchase of securities, etc.
• Crucially, reconcile the information in Form 16, your bank statements, Form 26AS, and AIS/TIS. If you find any discrepancies in AIS, you have the option to provide feedback online. Ensuring consistency is key to avoiding future notices.

Step 3: Selecting the Correct Assessment Year (AY) and Filing Mode

• Once logged in, navigate to ‘e-File’ -> ‘Income Tax Returns’ -> ‘File Income Tax Return’.
• Select the Assessment Year (AY) for which you are filing the return. Remember, the AY is the year immediately following the Financial Year (FY). For income earned between April 1, 2023, and March 31, 2024 (FY 2023-24), the AY is 2024-25.
• Select the Mode of Filing: Choose ‘Online’.
• Select your Status: Choose ‘Individual’.
• Choose the ITR Form: Select ‘ITR-1’ if it applies to you (as discussed earlier). Click ‘Proceed’. The system might also suggest the applicable ITR form based on your profile.

Step 4: Verifying Personal Information

The system will take you through different sections of the ITR form. The first is usually ‘Personal Information’.

• Much of this data (Name, PAN, Date of Birth, Address, Contact Details) will be pre-filled from your e-filing profile, PAN, and Aadhaar database.
• Verify all details carefully. Update your contact information (Mobile Number, Email ID) if necessary.
• Ensure your Bank Account details are correct. You must pre-validate at least one bank account where you wish to receive your tax refund (if any). Select the nominated bank account for refund.

Step 5: Filling Income Details – Crucial for Income Tax Filing for Salaried in India

Navigate to the ‘Gross Total Income’ section. This is where you report your earnings.

• Salary Income: Verify the pre-filled details derived mainly from your Form 16 (Part B) uploaded by your employer. This includes salary, allowances, perquisites, etc. Ensure the Standard Deduction (₹50,000) is claimed under Section 16(ia). Enter details manually if they are not pre-filled or need correction.
• Income from House Property: If you have one self-occupied house property and are claiming deduction for home loan interest (under Section 24(b)), enter the interest amount here (up to ₹2 lakh). If you have let out property or more than one property, ITR-1 is not applicable.
• Income from Other Sources: This is vital. Declare all other income like:
• Interest earned from Savings Bank Accounts.
• Interest earned from Fixed Deposits (FDs), RDs.
• Interest from Income Tax Refund.
• Dividend income.
• Any other taxable income not covered above (e.g., family pension).
• Carefully cross-check these figures with your Bank Statements and AIS/TIS. Accurate reporting here is essential for correct income tax filing for salaried in India.

Step 6: Declaring and Claiming Deductions

Move to the ‘Total Deductions’ section. Here you claim deductions under Chapter VI-A to reduce your taxable income.

• Some deductions claimed through your employer might be pre-filled (verify against Form 16 Part B).
• Enter details of deductions you are eligible for but were not claimed through your employer.
• Common deductions include:
• Section 80C: Up to ₹1.5 lakh (PPF, EPF contribution, ELSS, life insurance premium, home loan principal, children’s tuition fees, NSC, etc.).
• Section 80CCD(1B): Additional ₹50,000 for NPS contribution.
• Section 80D: Medical insurance premium (check limits for self/family and parents).
• Section 80G: Donations to eligible funds/charities (requires details of the donee).
• Section 80TTA: Deduction up to ₹10,000 on interest from savings bank accounts (for individuals other than senior citizens).
• Section 80TTB: Deduction up to ₹50,000 on interest from deposits for senior citizens.
• Ensure you have valid proofs for all deductions claimed. You don’t need to upload them with the return, but must keep them safe to produce if asked by the IT department later. Consider linking to a detailed TaxRobo guide on Tax Deductions if available.

Step 7: Verifying Tax Liability Calculation

Proceed to the ‘Tax Paid’ and ‘Total Tax Liability’ sections.

• The portal automatically calculates your tax liability based on the income and deductions you entered, according to the tax regime you selected (or the default regime if you didn’t explicitly choose).
• Verify the ‘Tax Paid’ details:
• TDS deducted by employer (should match Form 16/Form 26AS).
• TDS deducted by others (e.g., banks on FD interest, if applicable).
• Advance Tax or Self-Assessment Tax paid by you, if any.
• The final computation will show:
• Total Tax Liability.
• Total Tax Paid.
• Amount Payable (if liability > paid) or Refund Due (if paid > liability).
• Double-check the portal’s calculation. You can do a quick manual calculation or use an online tax calculator for peace of mind.

Step 8: Paying Tax Due (if any) or Confirming Refund

Based on the calculation in Step 7:

• If Tax is Due: You will see the amount payable. The portal usually offers a ‘Pay Now’ option, which redirects you to the e-Pay Tax service to generate and pay Challan 280 (Self-Assessment Tax). You can pay via Net Banking or Debit/Credit Card. There might also be a ‘Pay Later’ option, but it’s advisable to ‘Pay Now’ before submitting the return. After successful payment, the challan details (BSR code, date, serial number, amount) need to be entered in the ITR form.
• If Refund is Due: Re-confirm that the bank account selected for the refund is correct and pre-validated.
• If Tax Liability = Tax Paid: No further action is needed here; proceed to the next step.

Step 9: Previewing and Submitting the Return – Final Step in Step-by-Step ITR Filing India

This is the penultimate step before verification.

• Click on ‘Preview Return’. The system will generate a draft of your complete ITR form.
• Download this preview and review every section meticulously. Check personal details, income figures, deductions claimed, tax calculation, and bank account details one last time.
• Tick the declaration confirming the information provided is correct.
• Once fully satisfied, click ‘Proceed to Validation’. The system checks for errors. If none are found, click ‘Proceed to Verification’. This submits your return.
• Completing this marks the end of the step-by-step ITR filing India submission process, but one crucial step remains.

Post-Filing Formalities: The Crucial E-Verification Step

Submitting your ITR is not enough. Your filing is considered incomplete and invalid until it is verified.

Why E-Verification is Non-Negotiable

Verification confirms the authenticity of the return filed under your PAN. If you file your return but fail to verify it within the stipulated time, the Income Tax Department will treat it as if you never filed the return at all. This can lead to penalties, loss of ability to carry forward losses, and non-processing of refunds.

Methods for E-Verification: An Easy Income Tax Guide for Salaried Employees

The IT portal offers several convenient electronic methods (e-Verification) which are highly recommended:

• Aadhaar OTP: Generate an OTP sent to the mobile number linked with your Aadhaar. (Most popular method).
• Net Banking: Log in to your net banking portal and access the income tax e-filing option.
• Bank Account EVC: Generate an Electronic Verification Code (EVC) through your pre-validated bank account (if your bank provides this facility).
• Demat Account EVC: Generate an EVC through your pre-validated Demat account.
• Digital Signature Certificate (DSC): Applicable mainly for corporates or individuals whose accounts need auditing (less common for typical salaried employees).

Alternatively, you can opt for Physical Verification:

• Download the ITR-V (Acknowledgement) form after submission.
• Print it, sign it in blue ink.
• Send it via Ordinary Post or Speed Post only (not courier) to:
  CPC, Income Tax Department, Bengaluru - 560500, Karnataka.
• This method is slower, involves posting hassle, and tracking can be difficult. Electronic methods are faster and provide instant confirmation.

This step is a vital part of the easy income tax guide for salaried employees.

E-Verification Deadline

You must e-verify your return within 30 days of submitting it. (Note: Always check the latest rules on the official portal, as timelines can sometimes be revised). Do not miss this deadline!

Common Mistakes to Avoid When Filing Income Tax Returns for Salaried Individuals

Even with pre-filled data, errors can happen. Being aware of common pitfalls helps ensure accurate filing of your income tax returns for salaried individuals:

Choosing the Incorrect ITR Form

Using ITR-1 when you have capital gains or business income, for instance, will lead to a defective return. Double-check the applicability criteria mentioned earlier.

Not Verifying Pre-filled Information Thoroughly

While pre-filled data is helpful, don’t blindly trust it. Always cross-verify details from Form 16, Form 26AS, AIS/TIS, and your personal records (bank statements, investment proofs). Make corrections where needed.

Forgetting to Report All Income Sources

This is a frequent error. Remember to include:

• Interest from ALL savings bank accounts (even if small).
• Interest from Fixed Deposits (even if TDS was deducted).
• Dividend income.
• Any minor freelance income (if within ITR-1 limits for ‘Other Sources’). Non-reporting can lead to notices later.

Making Errors While Claiming Deductions

• Claiming deductions without having valid proof.
• Claiming amounts exceeding the permissible limits (e.g., claiming more than ₹1.5 lakh under 80C).
• Claiming deductions for which you are not eligible.

Missing the E-Verification Step or Deadline

As stressed before, failure to verify your return within 30 days makes the filing invalid. Set a reminder to complete this immediately after submission.

Conclusion

Filing your income tax returns for salaried individuals is a manageable process if approached systematically. By gathering your documents, understanding the basics like Form 16 and choosing the right ITR form and tax regime, you can navigate the e-filing portal effectively. Remember the key stages: log in, verify pre-filled data, carefully enter income and deductions, check the tax calculation, submit, and most importantly, e-verify within 30 days.

Accuracy and timeliness are paramount. The typical deadline for filing ITR for individuals whose accounts don’t need auditing (most salaried employees) is July 31st following the end of the financial year. However, always confirm the deadline for the specific Assessment Year on the official Income Tax portal. Filing on time avoids late fees and interest penalties.

Feeling unsure or need expert assistance with your income tax return process for employees in India? TaxRobo offers expert ITR filing services for salaried individuals and small business owners. Ensure accuracy, maximize potential refunds, and gain peace of mind. Link to TaxRobo’s ITR Filing Service Page.

Frequently Asked Questions (FAQs)

Q1: What happens if I miss the ITR filing deadline in India?

A: Filing your ITR after the due date (belated return) attracts a late filing fee under Section 234F. As per current rules (subject to change, please verify current figures), this fee is ₹5,000 if your total income exceeds ₹5 lakh, and ₹1,000 if your total income is up to ₹5 lakh. Additionally, interest under Section 234A will be charged on any unpaid tax liability. You may also lose the ability to carry forward certain losses (like capital losses or business losses, though less common for pure salaried cases using ITR-1).

Q2: Can I revise my income tax return if I made a mistake?

A: Yes, absolutely. If you discover any omission or wrong statement in your original return, you can file a revised return under Section 139(5) of the Income Tax Act. You can file a revised return anytime before December 31st of the Assessment Year (e.g., by Dec 31, 2024, for AY 2024-25), or before the completion of the assessment by the IT department, whichever is earlier (verify current deadline). A revised return replaces the original return completely.

Q3: My employer deducted TDS correctly. Do I still need to file an ITR?

A: Yes, in most cases. Filing an ITR is mandatory if your Gross Total Income (before deductions) exceeds the basic exemption limit. Even if it doesn’t, filing is necessary if you want to claim a tax refund. Furthermore, TDS deducted by your employer is based on the information provided to them; your ITR is the final reconciliation of all your income sources (including interest income, etc.) and deductions for the year with the tax department.

Q4: Is Form 16 mandatory for filing income tax returns for salaried individuals?

A: While Form 16 is extremely important and makes filing much easier and accurate, it is technically not mandatory to possess it to file your return. If your employer hasn’t issued Form 16, you can still file your ITR using your salary slips, bank statements (to ascertain salary credited), Form 26AS (to check TDS deducted), and AIS/TIS. However, the legal obligation to file the income tax return for salaried individuals itself remains if your income exceeds the threshold limit, irrespective of whether you received Form 16.

Q5: Where can I get professional help if I find the income tax filing for salaried in India process complex?

A: Tax laws and procedures can indeed seem complex. If you’re unsure or want to ensure everything is done correctly, seeking professional help is a good idea. You can consult qualified Chartered Accountants (CAs) or tax consultants. Alternatively, platforms like TaxRobo offer dedicated services specializing in income tax filing for salaried in India, providing expert assistance to ensure compliance, accuracy, and peace of mind. Link back to TaxRobo’s ITR Service Page