Income Tax Return for Salaried Individuals for AY 2024-25

For Assessment Year 2024-25, every salaried individual who has a taxable income shall be required to file ITR online on or before 31^st July. For tax filing, the income tax department has provided online e-filing facility through its e filing website known as eportal.incometax.gov.in. You can access the portal and e-file ITR using the correct form and applying the correct tax rates.

Before ITR filing you might be interested to know certain important information about income tax returns and tax rates. Read this article to get info about basic facts about ITR forms and income tax rates for salaried individuals.

What are the various ITR forms applicable to taxpayers?

The Income Tax Department has provided 7 different ITR forms on income tax site which you have to choose according to your income source. Choosing correct ITR form before efiling income tax return is very important. ITR- 5,6 & 7 are applicable to firms, companies and trusts including AOPs. Following are the remaining four ITR forms as below:

ITR-1 (SAHAJ)

ITR-1 form is applicable for individuals. This form is applicable for a Resident Individual (Other than Not Ordinarily Resident) having total income up to ₹ 50 lakh from any of the following sources:

• Salary/ Pension
• One House Property
• Income from other Sources (Interest, Dividend, Family Pension etc.)
• Agricultural Income up to ₹ 5,000

Who cannot e-file income tax return using ITR-1 form

• A person who is a director in a company.
• A person holding any unlisted equity shares at any time during the previous year
• A person who has any asset (including financial interest in any entity) located outside India.
• A person who has income from any source outside India.
• A person who has a signing authority in any account located outside India
• A person in whose tax has been deducted u/s 194N
• A person in whose case payment or deduction of tax has been deferred on ESOP
• A person who has any brough forward loss or loss to be carried forward under any head of income
• A person who has a total income exceeding ₹ 50 lakhs

ITR-2

ITR-2 is the most commonly used form for income tax filing applicable to individual and HUF. Following taxpayers can use ITR-2 form for income tax e-filing as below:

• Individuals and HUFs not having income under the head of “Profits and Gains of Business or Profession
• Those individuals who are not eligible to file ITR-1.

ITR-3

ITR-3 return form is applicable to individuals and HUFs in whose case ITR-1 & ITR-2 can not be filed. We have seen above that any individual or HUF having income from business or profession is not eligible to file ITR-2 online.

Thus, taxpayers having business or profession income can file income tax return either in ITR-3 or ITR-4. The taxpayers who want to file return of income on presumptive basis shall file ITR-4. All other taxpayers (individual or HUF) having business or professional income shall e-file income tax return in ITR-3.

ITR-4 (SUGAM)

ITR-4 (SUGAM) is applicable for individual, HUF and firms (other than LLP). LLP as well as companies cannot file their ITR in Form ITR-4 as these are not entitled to opt for presumptive taxation scheme. According to Income Tax Rules, ITR-4 is applicable for an individual or HUF, who is resident other than Not Ordinarily Resident or a Firm (other than LLP) which is a Resident having total income up to ₹ 50 lakh and having income from Business or Profession which is computed on a presumptive basis (u/s 44AD/44AE/44ADA) and income from any of the following sources:

• Salary/ Pension
• One House Property
• Other sources income (Interest, Family Pension, Dividend etc.)
• Agricultural Income up to ₹ 5,000

As appearing from the name, ITR-4 is a simplified (sugam) form to be used by an assessee, at his option, if he is eligible to declare his profits and gains from business or profession on presumptive basis u/s 44AD/44ADA/44AE.

Who cannot file income tax return in ITR-4 Form?

LLPs and Companies are not eligible to file ITR in Form ITR-4. Besides this, Individuals and HUFs not opting for presumptive taxation scheme are not allowed to use ITR-4 form for e-filing ITR.

ITR-4 cannot be used by a person who:

• Is a director in a company
• Has held any unlisted equity shares at any time during the previous year
• Has any asset (including financial interest in any entity) located outside India
• Has signing authority in any account located outside India
• Has income from any source outside India
• Is a person in whose case payment or deduction of tax has been deferred on ESOP
• Who has any brought forward loss or loss to be carried forward under any heads of income

Documents required for Income Tax Return (ITR) filing for salaried persons

Before income tax filing, there is a list of documents which a salaried person should arrange so that e-filing income tax return could be completed hassle-free. The list of documents includes PAN Card, Aadhar Card, Bank Statements, evidences of deductions to be claimed in ITR (like LIP receipt, medical insurance receipt, rent receipts, housing loan interest certificate, school fees receipts etc). Further, the following information is also important to be kept ready before filing:

Form 16

Form 16 is certificate of tax deducted at source on salary issued by employer to his employee at the end of the financial year. Form 16 contains the details of salary income of employee along with deductions/ exemptions claimed & TDS deducted by the employer.

Form 12BB

Form 12BB contains details of evidences or particulars of HRA, leave travel concession, deduction of interest on housing loan, Tax saving claims/ deduction on eligible payments or investments from the income of employee.

Form 16A

Like Form 16, Form 16A is also certificate of tax deducted at source but this form is not issued by the employer to the employee. Rather, form 16A is issued by the tax deductor for TDS deducted by him for payment of any amount other than salary. For example, if bank pays FDR interest, it will deduct TDS on such FDR interest and issue Form 16A to the accountholder in respect of such TDS.

Form 26AS

Form 26AS is a form showing details of tax deducted/ collected at source in respect of any taxpayer. The Income Tax Department provides facility of downloading Form 26AS from the e-filing portal. Form 26AS is an important document for filing return of income by taxpayers as it helps in calculating/ reconciling taxable income of the taxpayer.

AIS- Annual Information Statement

The facility of downloading Annual Information Statement (AIS) is provided by the Income Tax Department which can be accessed after logging in to the Income Tax e-filing portal. Annual Information Statement is a summary of various incomes derived by any assessee which is prepared by the Income Tax Department from various sources including TDS returns, SFT etc. Annual Information Statement (AIS) generally provides the following details:

• Tax Deducted/ Collected at Source
• SFT information like bank interest, FDR Interest, shares purchases/ sold during the year, sale or purchase of immovable property during the year etc.
• Payment of Taxes
• Demand/ Refund
• Other Information like pending/ completed proceedings, GST turnover, GST purchases, cash deposits in bank account, information received from foreign government etc.

Form 10E

Form 10E is the form for furnishing particular of income for claiming relief under section 89(1) and is provided by the employee claiming such relief to the Income Tax Department. Form 10E can be filed electronically (online) on the e-filing website of the Income Tax Department. It must be ensured that Form 10E is filed before ITR filing. Form 10E can be filed for claiming tax relief in the following cases:

• Arrears/ Advance Salary
• Gratuity
• Compensation on termination of employment
• Commutation of Pension

Tax Slabs for AY 2024-25

There are two different tax regimes for tax filers in India known as ‘Old Tax Regime’ & ‘New Tax Regime’. Till AY 2023-24, Old Tax Regime was default regime but from AY 2024-25, New Tax Regime as per section 115BAC will be default regime for the tax filers. It means that if you want to opt for old tax regime, then you will have to opt out of new tax regime electronically on e-filing portal.

Want to learn more about Old Tax Regime vs. New Tax Regime

‘Old Tax Regime’ offers tax slabs with higher tax rates but various deductions & exemptions are available in ‘Old Tax Regime’. However, in ‘New Tax Regime’, tax rates are lower as compared to ‘Old Tax Regime’ but almost negligible deductions/ exemptions are allowed to the tax filers in their income tax return.

Income Tax rates for Individuals

For (Resident or Non-Resident) less than 60 years of age at anytime during the year

For (Resident or Non-Resident) 60 years or more but less than 80 years of age at any time during the year

For (Resident or Non-Resident) 80 years of age or more at any time during the year

Note: The above income tax rates are also liable for surcharge and cess at the applicable rates.

Rates of Surcharge under Income Tax

What is Surcharge?

Surcharge is an additional charge levied for persons earning income above the specified limits. It is charged in the amount of income tax calculated as per applicable rates.

Surcharge Rates Income Tax

Income Tax calculated under Old Tax Regime as well as New Tax Regime will be subjected to surcharge at the applicable rates as follows:

Note: The enhanced surcharge of 25% & 37% is not levied from income chargeable to tax under sections 111A, 112, 112A and Dividend Income. These are the sections dealing with special rates of tax in case of capital gains. Hence, the maximum rate of surcharge on tax payable on such incomes shall be 15%.

Rebate under section 87A

Under Section 87A of the Income Tax Act, a special tax rebate is allowed to those taxpayers whose total income is within the prescribed limit. Therefore, if you are e-filing income tax return, don’t forget to take benefit of the rebate u/s 87A.

Rebate u/s 87A is available only to Resident Individuals. Non-Residents are not eligible for this rebate. Rebate up to 100% of income tax is allowed subject to a maximum limit depending on tax regime you choose:

Read More: Tax Rebate for Small Taxpayers

Health & Education Cess

Health & Education Cess is also payable on the amount of income tax plus surcharge in Old as well as New Tax Regimes.

Tax Deductions available for salaried individuals from income

Deduction for interest on Housing Loan

Section 24(b) of the Income Tax Act allows deduction from Income from House Property on interest paid on housing loan. In case of a property occupied for own use, the maximum deduction allowable towards interest on housing loan is ₹ 2 Lakhs. Please note that this deduction is not available if you are opting for new tax regime.

Allowable deduction under section 24(b) is as follows

Tax Deductions allowed under Chapter VI-A

Deductions under Chapter VI-A are not available if the taxpayer is opting for New Tax Regime u/s 115BAC. Under New Tax Regime, only 2 deductions are allowed namely u/s 80CCD (2) & 80CCH.

Concluding Remarks: Every salaried individual whose income falls in taxable bracket is required to file ITR on or before 31^st July every year. Timely E-filing ITR is very crucial for faster processing of returns and refunds. Income Tax Return filing before due date is also necessary to carry forward losses for next 8 years, which are arising due to share trading, F&O trading. It is important to carefully calculate admissible deductions before choosing favourable tax regime by a salaried individual.

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