Filing of Income Tax Return (ITR) is a statutory obligation under the Income Tax Act, 1961. For salaried individuals, filing ITR is not only mandatory when the income exceeds the basic exemption limit, but also advisable for record keeping, claiming refunds, and ensuring compliance.
This article explains the provisions applicable to salaried individuals, with practical illustrations, deductions, and calculation methods.
Applicability: Who Must File ITR?
As per Section 139(1) of the Income Tax Act, 1961:
“Every person whose total income during the previous year exceeds the maximum amount not chargeable to income tax is required to file ITR.”
Basic Exemption Limit (AY 2024–25)
| Age Category | Basic Exemption Limit |
|---|---|
| Individuals below 60 years | ₹2.5 Lakhs |
| Senior Citizens (60–80 years) | ₹3 Lakhs |
| Super Senior Citizens (80+) | ₹5 Lakhs |
- You want to claim a refund of TDS.
- You are a director or have foreign assets.
- You deposit over ₹1 crore in bank accounts or spend ₹2 lakh on foreign travel (as per Rule 12AB).
ITR Form for Salaried Individuals
As per the Notification issued under Rule 12 of Income Tax Rules, 1962:
- ITR-1 (Sahaj): For resident individuals having income up to ₹50 lakhs from:
- Salary
- One House Property
- Other Sources (excluding lottery, race horses)
- ITR-2: If income from salary exceeds ₹50 lakhs, or has capital gains, foreign income/assets, etc.
Components of Salary Income [Section 17(1)]
The salary includes:
- Basic Salary
- Dearness Allowance (DA)
- House Rent Allowance (HRA)
- Leave Travel Allowance (LTA)
- Perquisites [Sec 17(2)]
- Bonus/Commission
- Gratuity, Pension, etc.
Salary is taxable on due or receipt basis, whichever is earlier.
Deductions Allowed under Income Tax Act
| Section | Deduction Type | Max Limit |
|---|---|---|
| 16(ia) | Standard Deduction | ₹50,000 |
| 80C | LIC, PPF, EPF, ELSS, etc. | ₹1.5 Lakhs |
| 80D | Medical Insurance | ₹25,000 – ₹50,000 |
| 80CCD(1B) | NPS Contribution | ₹50,000 |
| 80E | Interest on Education Loan | No Limit |
| 80TTA | Savings Interest | ₹10,000 |
Income Tax Slabs – AY 2024–25
Old Regime Slabs:
| Income Slab | Tax Rate |
|---|---|
| 0 – ₹2.5 Lakh | Nil |
| ₹2.5L – ₹5L | 5% |
| ₹5L – ₹10L | 20% |
| Above ₹10L | 30% |
| Income Slab | Tax Rate |
|---|---|
| 0 – ₹3L | Nil |
| ₹3L – ₹6L | 5% |
| ₹6L – ₹9L | 10% |
| ₹9L – ₹12L | 15% |
| ₹12L – ₹15L | 20% |
| Above ₹15L | 30% |
- Standard deduction (₹50,000)
- NPS (Employer contribution) – Section 80CCD(2)
- Agniveer Corpus Fund – Section 80CCH
Case Study 1: Old vs New Regime
>Mr. Arvind, Age: 35
Gross Salary: ₹9,00,000
Investments: ₹1.5L in PPF, ₹50K in NPS
HRA Exemption: ₹1,00,000
Medical Premium (80D): ₹25,000
Old Regime:
- Gross Salary: ₹9,00,000
- Less: HRA Exemption: ₹1,00,000
- Less: Standard Deduction: ₹50,000
- Less: 80C (PPF): ₹1,50,000
- Less: 80CCD(1B) (NPS): ₹50,000
- Less: 80D: ₹25,000
- Net Taxable Income: ₹5,25,000
Tax Calculation:
- ₹2.5L – ₹5L @ 5% = ₹12,500
- ₹5L – ₹5.25L @ 20% = ₹5,000
- Total = ₹17,500
- Less: Rebate under 87A = ₹12,500
- Final Tax = ₹5,000 + Cess (₹200) = ₹5,200
New Regime (Section 115BAC):
- Gross Salary = ₹9,00,000
- Less: Standard Deduction = ₹50,000
- Taxable Income = ₹8,50,000
Tax Calculation:
- ₹0 – ₹3L = Nil
- ₹3L – ₹6L @ 5% = ₹15,000
- ₹6L – ₹9L @ 10% = ₹25,000
- Total = ₹40,000 + Cess (₹1,600) = ₹41,600
Better to opt Old Regime for Mr. Arvind due to higher deductions.
Step-by-Step Process to File ITR
1.Login to https://www.incometax.gov.in
2. Go to e-File → Income Tax Return → File Now
3. Select AY 2024–25 → Individual → Online Mode
4. Choose correct ITR Form (ITR-1/ITR-2)
5. Confirm income details auto-filled from Form 16 and 26AS
6. Select regime (Old/New)
7. Claim deductions under Chapter VI-A (for old regime)
8. Validate tax computation
9. Submit and e-verify (Aadhaar OTP/Net Banking/Demat/DSC)
Due Dates and Penalties
| Action | Due Date (AY 2024–25) |
|---|---|
| Filing ITR (Non-audit) | 31st July 2025 |
| Belated Return | 31st December 2025 |
- ₹5,000 (if income > ₹5L)
- ₹1,000 (if income ≤ ₹5L)
Final Tips
- Always reconcile Form 16 with Form 26AS and AIS/TIS
- Report all incomes: salary, interest, capital gains, etc.
- Choose the appropriate regime carefully
- File on time to avoid penalty and interest
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