Everything you need to know about Income-tax Returns for a Salaried Taxpayer

Income Tax Return is a form wherein a person has to furnish all the details regarding his income earned and tax applicable on the same. There are 7 ITR forms notified till date. The Central Board of Direct Taxes (CBDT) has notified Income Tax Return (ITR) Forms for the Assessment Year 2021-22 vide Notification No. 21/2021, dated 31-03-2021.

Considering the crisis due to the COVID pandemic, the board has not changed the ITR forms significantly. But the scope of ITR-1 and 4 has been restricted by amending Rule 12. It has been provided that an assessee in whose case payment or deduction of tax in respect of such ESOPs has been deferred shall not be eligible to furnish his return of income in ITR-1 and ITR-4. In addition to this assesses in respect of which TDS has been deducted under section 194N has also been restricted to file ITR-1.

A salaried person can file following ITRs depending on the type of income and amount of his total income. Please refer to “[2021] 126 taxmann.com 39 (Article)” to understand in detail the restrictions on filing various ITR.

1. Applicable forms

1.1 ITR- 1

Return in Form ITR 1 can be filed by an Ordinary Resident Individual (not HUF), if his total income includes:

• Salary or pension;
• Income or loss from one house property (excluding brought forward losses and losses to be carried forward);
• Family pension;
• Income from other sources (other than income chargeable to tax at special rates).

1.2 ITR- 2

Return in ITR 2 can be filed by an individual and HUF, whether resident or non-resident, in respect of following incomes:

• Salary or pension;
• Income or loss from one or more house properties;
• Income or loss under the head Capital Gains;
• Income under the head other sources (including income chargeable at special rates).

1.3 ITR- 3

Income-tax return can be filed in ITR 3 by an Individual or HUF if he/it has income from business or profession.

1.4 ITR-4

Return in ITR 4 (Sugam) can be filed by an Ordinary Resident Individual or HUF or Firm (other than an LLP) if his/its total income includes:

• Presumptive Income computed as per provisions of Sections 44AD, Section 44ADA or Section 44AE;
• Salary or pension;
• Income or loss from one house property (excluding brought forward losses and losses to be carried forward);
• Family pension;
• Income from other sources (other than income chargeable to tax at special rates).

2. How to file form?

The return of income can be filed electronically on the e-filing portal www.incometaxindiaefiling.gov.in. However, certain class of taxpayers can file the return in paper format in their jurisdictional tax office.

The option to file the income-tax return in paper mode is available only to a super senior citizen (whose age is 80 years or above during the financial year) only if return is being filed in ITR 1 (Sahaj) and ITR 4 (Sugam).

In all other cases, income-tax return has to be filed electronically. Return of income can be filed through electronic mode using any of the following three options:

• E-filing using a Digital Signature (DSC);
• E-filing under Electronic Verification Code (EVC) or Aadhaar OTP;
• E-filing with verification through ITR-V.

3. Relevance of Form 16 and 26AS

Form 16 (TDS certificate for salary income)

Form 16 is a certificate issued by an employer to its employees containing details regarding the salary and TDS deducted thereon. It contains all the information regarding your salary income and TDS thereon deducted and deposited by the employer. While filing the return for the year, a salaried person shall refer to the form so as to ensure full disclosure of his salary income and other information regarding TDS deducted thereon.

Form 26AS

Form 26AS is a consolidated statement containing majorly all the income tax related transactions of a person. One should ensure that all the information as provided in form 26AS has been furnished in the ITR, there should not be any difference in the TDS amount claimed in the return and that of the form 26AS.

4. Due date for filing ITR

5. Consequences of not filing the return on time

5.1 Levy of Interest

If an assessee fails to furnish Income-tax return on or before the due date, he shall be liable for payment of interest under Section 234A for delay in furnishing of such return. Simple interest shall be charged at the rate of 1% per month or part thereof.

5.2 Late filing fees

Fee for default in furnishing return of income shall be Rs. 5,000. However, where the total income of the person does not exceed Rs. 5,00,000, the fee payable shall not exceed Rs. 1,000.

5.3 Prosecution

Where an assessee fails to furnish a return of income on or before the due date, he shall be punishable with imprisonment, for a period ranging from 3 months to 7 years and fine under section 276CC.

Read More:

Things to Keep in Mind While Filing Your ITR

Filing ITR – Don’t make these 7 mistakes

Income Tax Reliefs Given by Government Due to Covid-19

FAQs on Filing the Return of Income