Filing income tax returns promptly is an all-important financial exercise for salaried individuals in India. However, the procedure for filing returns remains fenced by several misconceptions and a general lack of information.

So, in this article, you will find answers to all your queries about how to file ITR for salaried employees.

Let’s get started!

Now that you are familiar with filing income tax returns, let us elaborate on how e-filing of ITR for a salaried individual is done. Simply follow these steps:

• Step 1: Navigate to the e-filing portal of the Income Tax Department. 
  
• Step 2: Log in to the portal by submitting your user ID (PAN), password, and a CAPTCHA code. If you are not registered with this portal, you can sign up using your Permanent Account Number (PAN), which will then serve as a user ID.
  
• Step 3: Under the e-file section, click on ‘Income Tax Return’ from the drop-down menu and select the relevant assessment year. At this point, you need to select the appropriate income tax return (ITR) form and download it. Salaried employees can opt for ITR-1, ITR-2, or ITR-3 (which we shall delve into later in this article).
  
• Step 4: Select the filing type as ‘Original’ if you are not filing for a revised return.
  
• Step 5: Choose the submission mode of ‘Prepare and Submit Online’ and click on ‘Continue.’
  
• Step 6: Now, fill in the relevant ITR form with all the necessary details related to your income, deductions, exemptions, and investments. Then, you are required to add the details of tax payments through TDS, TCS, and advance tax. However, ensure that all data is accurate. Additionally, click on the ‘Save The Draft’ option periodically to avoid losing data due to technical errors.
  
• Step 7: Compute the tax payable and pay tax. Then, enter the challan details in your tax return. (You should skip this step if you do not have any tax liability).
  
• Step 8: Confirm the details entered in the form. Then, select ‘Submit.’ This is how you can file ITR online for a salaried employee.
  

At this point, a message flashes on your computer screen, prompting successful e-filing. Subsequently, an acknowledgement form called ITR-V is generated. Now, you must verify your return by way of any of these modes:

• Aadhaar OTP
  
• Bank account number
  
• Demat account number
  
• Registered mobile number
  
• Net banking
  
• Bank ATM
  
• Sending a physical copy of the acknowledgement to the Centralised Processing Centre (CPC) in Bengaluru via post
  

This is how you can file ITR for a salaried person.

Filing ITR-1 requires certain government-issued documents. These are: 

• Pan card
  
• Aadhaar card
  
• Bank statement/Passbook
  
• Form 16
  
• Salary slips
  
• Form 26AS
  
• Form 16A 
  
• Exemptions under Section 80D and 80U
  
• Capital gains statement
  

In addition to these, you will require an income tax login ID and password.

If you are an employee, you should know more than just how to file an income tax return for a salaried person. You should know that such a filing is necessary only when your taxable income falls above the exemption limit.

For FY 2024-25, the basic exemption limit under the old tax regime is ₹2,50,000, while for the new tax regime it was ₹3,00,000. For FY 2025-26, this exemption limit under the new tax regime has been raised to ₹4,00,000.

So, salaried individuals need to file ITR for the current FY 2024-25 (AY 2025-26) only if the annual income exceeds the respective amounts under the old and new tax regimes.

This is perhaps the most common query after how to file an income tax return for a salaried person. So, let us elucidate on why salaried employees should file ITRs by highlighting the benefits of doing so:

1. Adjustment of capital gains or losses

Filing income tax returns is especially for you if you invest in the equity market and buy or sell shares. Moreover, the adjusted short-term capital losses can be carried forward for up to 8 years when you submit the ITR for a given financial year. 

2. Claim tax refunds

Once the tax is deducted, you can get tax refunds only by submitting your IT return for the financial year. Therefore, refunds on TDS on rent payments or fixed deposits get initiated after you file returns and claim your desired tax deduction.

3. Convenient application for loans

An income tax return is more than just a financial statement – it specifies your annual earnings as well. As a result, banks and NBFCs often require copies of ITRs for granting loans, such as a home loan or vehicle loan. Moreover, filing returns despite having no taxable income increases the chances of loan approval compared to an individual with the same income but no ITRs.

4. Visa processing

At the time of the visa interview, several foreign consulates require you to furnish your ITR receipt for the last couple of years. Producing this document indicates that an individual has a considerable source of revenue in India, which strengthens his/her candidacy for visa approval.

Generally, the last date to file an income tax return for individual taxpayers is July 31st in the subsequent financial year. For example, the due date to file an ITR for FY 2022-23 is July 31st, 2023.

However, this date is subject to extension as and when deemed suitable by the Central Board of Taxes (CBDT). For instance, although the last date to file ITR for FY 2019-2020 was July 31st, 2020, it was extended to December 31st, 2020, due to COVID.

Have you missed the due date to file your income tax return? Do not fret. Allow us to explain how to file ITR for salaried employees after the due date:

1. File a belated return

You can still file your income tax return after the due date, which is known as a belated return. It must be filed after the initial deadline (31st July) but before the extended deadline (31st December).

Filing a belated return is essentially the same as filing an ITR before the due date. The primary difference while filing a belated return is that while filing the applicable ITR form, you must select ‘Return Filed under Section 139(4)’.

2. Pay a late filing fee or penalty

The downside to filing an income tax return after the due date is that it attracts a penalty. Therefore, you are liable to pay a late filing fee under Section 234F of the Income Tax Act, the amount of which is variable.

The table below highlights the amount of penalty generally payable by different categories of taxpayers: