Filing an Income Tax Return (ITR) is an essential financial responsibility for salaried employees in India. It ensures compliance with the Income Tax Act and enables individuals to claim refunds, carry forward losses, and maintain a clean financial record. While the process may seem complex, it has become significantly easier with the introduction of IT return e filing 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
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Salaried individuals are required to file an ITR if:
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: ₹3 lakh for individuals from all age groups (₹4 lakh from financial year 2025-26)
2. Claiming Refunds: If your employer has deducted excess tax (TDS), filing an ITR helps you claim a refund.
3. Having Multiple Income Sources: If you earn from sources like fixed deposits, rental income, or freelance work alongside your salary.
4. Foreign Assets or Income: Individuals with foreign income or assets must declare them in their IT return e filing.
5. If You Want to Apply for Loans or Visas: Financial institutions and embassies often require ITR proof for processing applications.
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Before taking the benefit of IT return e filing, ensure you have the following documents:
Form 16: Issued by your employer, it contains details of salary, deductions, and TDS.
Form 26AS: A tax credit statement available on the Income Tax portal that reflects TDS deducted.
Salary Slips: Helps in verifying salary details and allowances.
Bank Statements: For tracking interest earned and other sources of income.
Investment Proofs: Includes LIC policies, ELSS, PPF, and tax-saving FD receipts for deductions under Section 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.
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:
During IT return e filing, salaried employees should file either:
ITR-1 (Sahaj): For individuals earning up to ₹50 lakh from salary, one house property, and other income sources (excluding capital gains).
ITR-2: If your salary exceeds ₹50 lakh or you have capital gains, foreign assets, or multiple house properties.
Visit the official Income Tax e-filing portal: https://www.incometax.gov.in.
Click on ‘Login’ and enter your PAN as the user ID.
Enter your password and the CAPTCHA code to proceed.
The portal now provides a pre-filled ITR form based on your Form 16 and Form 26AS. Verify all details, including:
Salary and TDS deductions.
Interest income from fixed deposits or savings accounts.
Any other income sources.
To reduce taxable income, claim deductions under:
Section 80C: PPF, EPF, ELSS, NSC, tax-saving FDs (up to ₹1.5 lakh).
Section 80D: Health insurance premiums.
House Rent Allowance (HRA): If residing in rented accommodation.
Standard Deduction: ₹50,000 is available for all salaried employees.
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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 80C and 80D) cannot be claimed.
You must inform your employer about your chosen tax regime; otherwise, you will be taxed under the default new regime.
Source: Income Tax Department
If tax is payable, make an online payment via Net Banking/UPI/Debit Card.
If excess tax is deducted, a refund request is automatically generated.
Click "Proceed to Verification" and e-verify using Aadhaar OTP, Net Banking, or Digital Signature.
After submission, download the ITR-V acknowledgment receipt. If e-verification was skipped, send a signed copy to CPC, Bengaluru, within 30 days.
Filing an ITR is not just a legal obligation but also a financially prudent practice. 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 for the deadline and start the process today!
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 installments.
If you make a mistake, such as entering incorrect income details or missing deductions, you can revise your ITR before December 31 of the assessment year. 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 234F
Interest charges under Section 234A, 234B, and 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
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