Salaried individuals can file income tax returns (ITR) using the forms ITR-1 or ITR-2. ITR-1 applies to individual resident taxpayers with a total income of up to Rs 50 lakhs. Whereas, ITR-2 applies to other individual taxpayers who do not have income from business or profession.

ITR-1 can be used to report income from salary, one house property, income from other sources, and agricultural income of up to Rs. 5,000. The form ITR-2 can be filed by individuals having income from more than one house property, capital gains, holding directorship in any company, or unlisted equity shares.

Filling up your ITR:

ITR-1

Taxpayers would have to fill in aggregate values of the broad components of salary:

  • Salary
  • Perquisites
  • Profits in place of salary

Furthermore, a complete break-up would need to be provided of all allowances exempt under section 10. For example:

  • House rent allowance
  • Leave travel allowance
  • Gratuity

Similarly, each of the deductions allowed under chapter VI-A from section 80C to 80U must be reported separately. For example:

  • Life insurance premium, tuition fees for children, and PPF investment under section 80C
  • Medical insurance premium under section 80D
  • Donations under section 80D

ITR-2

Similar to the filing of ITR-1, taxpayers filing ITR-2 would also need to provide complete details of all the exempt allowances and deductions. In addition, ITR-2 requires taxpayers to submit complete break-up of various components of salary furnishing the specified amounts falling under salary, perquisites, and profits in lieu of salary. This information can be obtained from the annexure with Form 16 provided by an employer.

The salary TDS certificate in Form 16 has been revised to provide for more detailed information on the various tax-exempt allowances and deductions provided under the income tax law. Part B of Form 16 has been revised to provide for details of the various exemptions and deductions allowed under the income tax law.

In ITR-2, taxpayers have to provide employer-wise details in case of salary received from more than one employer in a financial year. The revised format of Form 16 obtained from one or more employer would help to file details required in ITR-2.

Employees would no longer find it difficult to fill in the details required in ITR-1 and ITR-2. Employees can obtain all the details from Form 16 issued in the revised format to file their ITR.

If you use an online platform to file your ITR, these details can be automatically populated to your ITR, minimising your effort and helping you e-file accurately.

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Qualification: CA in Practice
Company: Nikita Goel & Associates
Location: Gurgaon, Haryana, IN
Member Since: 20 Jun 2019 | Total Posts: 2

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2 Comments

  1. KKRao says:

    I feel that it is equally important for contributors to contribute the step by step of Income Tax by the other section of people. They are Senior Citizens above 60 years and have less than taxable income and yet to submit ITR as hey have income from other sources and more than one let out houses. This time still time is there for them to submit, hence you can submit yet another article on this.

  2. GANDHI MOHAN BHARATI says:

    Sorry – when one serves under 3 different employees and none deduct TDS there will be no Form 16 and getting details asked for in ITR 2 isnot available in 26AS also

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