Guide to File ITR for Salaried Employees

Guide to Filing ITR for Salaried Employees in India

Understand how to file ITR as a salaried employee in India, including eligibility, documents required, and a step-by-step e-filing guide

Written by : Knowledge Centre Team

2026-07-31

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5 minutes read

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Filing an Income Tax Return (ITR) is an essential financial responsibility for salaried employees in India who meet the income threshold and eligibility criteria. It ensures compliance with the Income Tax Act and enables individuals to claim refunds, carry forward eligible losses, and maintain a clean financial record. While the process may seem complex, it has become significantly easier with the introduction of the Income Tax Department's e-filing portal and tools like taxable income calculators.

This guide will take you through the step-by-step process of filing an ITR for salaried employees in India, including eligibility and the required documents.

Key Takeaways

  • Salaried employees must file an ITR if their income exceeds the exemption limit, have multiple income sources, own foreign assets, or need to claim refunds

  • Key documents include Form 130 (previously called Form 16), Form 168 (previously called Form 26AS), salary slips, bank statements, investment proofs, home loan interest certificates, Aadhaar, and PAN card

  • Filing your ITR accurately and on time helps avoid notices, delays, and penalties while keeping your tax records hassle-free

  • The new tax regime is the default; taxpayers can opt for the old regime each year for exemptions like Section 123 (previously called 80C) and Section 126 (previously called 80D) 

  • ITR can be filed online via the Income Tax portal, verified using Aadhaar OTP, Net Banking, or Digital Signature, with the provision to download the acknowledgement receipt

What is an ITR?

An Income Tax Return (ITR) is the form filled out and duly submitted to the Income Tax Department that declares your total income earned during a specific financial year, the taxes paid on it, the deductions claimed, and any tax liability or refund due. It applies to individuals, businesses, and other entities, serving as an official record of income earned and tax compliance for that year. Filing an ITR is crucial as it helps you to claim refunds, apply for a loan, and maintain a good financial record. Once your income crosses the tax-paying slab, it becomes a legal obligation. 

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Who Needs to File an ITR?

Not every individual is required to file an ITR, but the eligibility criteria are not just about earning above the basic income threshold set. Sometimes, certain financial transactions and activities can make ITR filing compulsory, even if your income has not crossed the limit. Here is when it is applied to salaried individuals, where they would be required to file an ITR

  1. Annual Income Exceeds the Basic Exemption Limit:

    • Old regime: ₹2.5 lakh for individuals below 60 years, ₹3 lakh for senior citizens (60-80 years), and ₹5 lakh for super senior citizens (above 80 years)
    • New regime: ₹4 lakh for individuals from all age groups
  2. Claiming Refunds: If your employer has deducted excess tax (TDS), filing an ITR helps you claim a refund.

  3. Multiple Income Sources: If income from sources like fixed deposits, rental income, or freelance work, combined with your salary, pushes your total income above the exemption threshold, filing becomes mandatory.

  4. Foreign Assets or Income: Only Resident and Ordinarily Resident (ROR) individuals must disclose foreign assets and income under Schedule FA in their IT return e-filing, even if the total income is below the exemption limit. NRI and Resident but Not Ordinarily Resident (RNOR) individuals are excluded from this requirement. 

  5. Loans or Visa Applications: Financial institutions and embassies often require ITR proof for processing applications.

  6. High-Value Transactions: Tax filing is mandatory in case you have a deposit of ₹1 crore or more in your current bank account, and have spent a total of ₹2 lakh on foreign travel, or made a payment of ₹1 lakh as an electricity bill. It will not be taken into consideration if your income is below the exemption limit.

What Documents Are Required for Filing ITR?

Before taking the benefit of IT return e-filing, ensure to check these documents required for ITR filing by salaried individuals:

  • Form 130 (previously called Form 16): Issued by your employer, it contains details of salary, deductions, and TDS

  • Form 168 (previously called Form 26AS): A tax credit statement available on the Income Tax portal that reflects TDS deducted

  • Salary Slips: Help in verifying salary details and allowances

  • Bank Statements: For tracking interest earned and other sources of income

  • Investment Proofs: Include life insurance policies, ELSS, PPF, and tax-saving FD receipts for deductions under Section 123 (previously called 80C)

  • Home Loan Interest Certificate: If you are claiming deductions under Section 24(b)

  • Aadhaar Card and PAN Card: Required for verification and linking with the ITR portal

Step-by-Step Guide to Filing ITR for Salaried Employees

With the introduction of IT return e-filing systems, the process has become more streamlined, making it easier for taxpayers to fulfil their obligations. Here is a step-by-step guide:

  • Step 1: Choose the Correct ITR Form: One of the most common questions salaried taxpayers have is which ITR form to file. The answer depends mainly on the total income, the number of income sources, and whether you have capital gains. During IT return e-filing, salaried employees should file either:

    1. ITR-1 (Sahaj): For individuals earning up to ₹50 lakh from salary, one house property, and other income sources (excluding capital gains)
    2. ITR-2: If your salary exceeds ₹50 lakh or you have capital gains, foreign assets, or multiple house properties
  • Step 2: Log in to the Income Tax Portal:

    1. Visit the official Income Tax e-filing portal: https://www.incometax.gov.in
    2. Click on ‘Login’ and enter your PAN as the user ID
    3. Enter your password and the CAPTCHA code to proceed
  • Step 3: Pre-Filled Information and Income Verification: The portal now provides a pre-filled ITR form based on your Form 130 (previously called Form 16) and Form 168 (previously called Form 26AS). Verify all details, including:

    1. Salary and TDS deductions, along with interest income from fixed deposits or savings accounts
    2. Any other income sources
  • Step 4: Claim Deductions and Exemptions: To reduce taxable income, claim deductions under:

    1. Section 123 (previously called80C): PPF, EPF, ELSS, NSC, tax-saving FDs (up to ₹1.5 lakh)
    2. Section 126 (previously called 80D): Health insurance premiums
    3. House Rent Allowance (HRA): If residing in rented accommodation
    4. Standard Deduction: ₹75,000 is available for all salaried employees
  • Step 5: Compute Your Tax Liability: After deductions, use the taxable income calculator to determine your tax liability based on the old or new tax regime:

Old Regime 

Income Slab

Tax Rate

Upto ₹2.5 lakh

Nil

₹2.5 lakh-₹5 lakh

5% above ₹2.5 lakh

₹5 lakh-₹10 lakh

₹12,500 + 20% above ₹5 lakh

Above ₹10 lakh

₹1,12,500 + 30% above ₹10 lakh

*Rates remain the same across financial years.

New Regime 

FY 2024-25

FY 2025-26

Income Slab

Tax Rate

Income Slab



Tax Rate

Upto ₹3 lakh

Nil

Upto ₹4 lakh 

Nil

₹3 lakh-₹7 lakh

5% above ₹3 lakh

₹4 lakh-₹8 lakh

5% above ₹4 lakh

₹7 lakh-₹10 lakh

₹20,000 + 10% above ₹7 lakh


₹8 lakh-₹12 lakh

₹20,000 + 10% above ₹8 lakh

₹10 lakh-₹12 lakh

₹50,000 + 15% above ₹10 lakh

₹12 lakh-₹16 lakh

₹60,000 + 15% above ₹12 lakh

₹12 lakh-₹15 lakh

₹80,000 + 20% above ₹12 lakh

₹16 lakh-₹20 lakh 

₹1,20,000 + 20% above ₹16 lakh

Above ₹15 lakh

₹1,40,000 + 30% above ₹15 lakh

₹20 lakh-₹24 lakh

₹2,00,000 + 25% above ₹20 lakh

Above ₹24 lakh

₹3,00,000 + 30% above ₹24 lakh

Under the new tax regime, lower rates apply, but exemptions like Section 123 (previously called 80C) and Section 126 (previously called 80D) cannot be claimed.

Do you know

Did You Know?

Over 7.28 crore Income Tax Returns were filed in AY 2024-25, reflecting India's growing adoption of digital tax filing
 

Source: PIB

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  • Step 6: Verify and Submit Your Return:

    1. If tax is payable, make an online payment via Net Banking/UPI/Debit Card
    2. If excess tax is deducted, a refund request is automatically generated
    3. Click "Proceed to Verification" and e-verify using Aadhaar OTP, Net Banking, or Digital Signature

      Note: E-Verification needs to be completed within 30 days.
  • Step 7: Download the Acknowledgement: After submission, download the ITR-V acknowledgement receipt. If e-verification was skipped, send a signed copy to CPC, Bengaluru, within 30 days.

Common Mistakes to Avoid While Filing ITR

Even with all the required documents, you can still make small errors when filing your ITR, which can lead to delays or rejections. Some of the common mistakes have been discussed here, which can be taken note of:

  • Choosing the Wrong ITR Form: Filing ITR-1 even if you have capital gains, foreign assets, or multiple properties will make the return defective. You need to file ITR-2 in such cases.

  • Non-Verification of Return: ITR filing is incomplete without e-verification. This needs to be done within 30 days of filing; otherwise, the return is treated as invalid. 

  • Ignoring Form 168 (previously called Form 26AS) Mismatches: If you fail to reconcile the TDS shown in Form 168 (previously called Form 26AS) with the actual income, it can cause a delayed refund or a formal notice from the department. 

  • Forgetting to Select the Old Regime: Since the new regime is the default, if you want exemptions like Section 123 (previously called 80C) or Section 126 (previously called 80D), you need to actively opt for the old regime each year. 

  • Missing PAN-Aadhaar Linking: Refunds are blocked, invalidating the return, if the PAN is non-operative because you missed or forgot to link the PAN with Aadhaar.

Conclusion

Beyond the legal requirement, filing for an ITR will help to create a financial paper trail, which will end up working in your favour. It becomes beneficial for getting loans, claiming refunds or for visa applications. With the government's push toward digital processes, salaried employees can now file their returns effortlessly using the online portal. You can file your ITR smoothly and on time by choosing the correct form, verifying your income, and claiming the right deductions.

If you have not filed your ITR yet, do not wait until the deadline; start the process today.

Glossary

  1. House Rent Allowance: A benefit that is a part of an employee’s salary package and helps cover rental expenses
  2. PAN: A unique 10-digit alphanumeric identification issued by the Income Tax Department to track financial transactions
  3. Section 123 (previously called 80C): A provision that allows deductions of up to ₹1.5 lakh on investments to reduce taxable income
  4. TDS: A mechanism where tax is deducted by the payer before making payments like salary, interest, or rent 
  5. Standard Deduction: A fixed amount that is allowed to be deducted from the gross income for a taxpayer
Glossary book
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FAQs

Salaried individuals usually do not need to pay advance tax as TDS is deducted by employers. However, if you have additional income (such as freelance work or rental income) and your tax liability exceeds ₹10,000 in a year, you must pay advance tax in quarterly instalments.

If you make a mistake, such as entering incorrect income details or missing deductions, you can revise your ITR before 31st March 2027. In case you revise your return after 31st December 2026, a fee of  ₹5,000 if total income exceeds ₹5 lakh, or ₹1,000 if it is up to ₹5 lakh. You just need to simply log in to the income tax portal, select “Revised Return” under the same ITR form, correct the errors, and resubmit.

If you do not file an ITR despite being eligible, you may face:
 

  • A penalty under Section 428 (previously called 234F)

  • Interest charges under Section 423 (previously called 234A), Section 424 (previously called 234B), and Section 425 (previously called 234C) for delayed tax payments

  • Difficulty in securing loans, visas, or government clearances

  • Possible scrutiny or notices from the Income Tax Department for non-compliance

Salaried employees can file either ITR-1 (Sahaj) or ITR-2, as per their income profile. ITR-1 can be filed if applied in case your total income is up to ₹50 lakh. If your income exceeds ₹50 lakh, you can file ITR-2.

 

The simple steps followed to file ITR online for a salaried person are:

 

  • Choose the right ITR Form as per the salary bracket

  • Log in to the official Income Tax e-filing portal using the PAN Card as the user ID

  • Review and verify all the pre-filled details

  • Make a claim for the deduction if applicable

  • Compute your tax liability

  • Verify all the information mentioned and submit

Salaried individuals should file an ITR if their total annual gross income exceeds the basic exemption limit, or, in certain cases, when they meet mandatory conditions such as making a deposit of over ₹50 lakh, travelling internationally, or claiming a refund of TDS.

Once you submit the ITR, e-verification will be done in 30 days. Once the verification is complete, the Centralised Processing Centre (CPC) processes it in a total of 45 working days by drawing out a comparison with Form 168 (previously called Form 26AS/AIS). An intimidation would be given to you, which could be: no refund, a refund credited to your bank account, or a demand for additional tax.

Yes, salaried employees can revise their ITR once it has been filed. Under Section 139 (5) of the Income Tax Act, you are allowed to make corrections to the errors made in the original return. So, to file a revised return, you would need to submit either the original ITR or a belated one by the mentioned deadline so that it gets successfully e-verified.

Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.

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