ITR Income Tax Return
If the ITR is to be said in one line, it will be in writing to the government to give a statement of its annual income (income, earnings) to the government, called income tax return – ITR. This is brief information about ITR.
Suppose your income is 1.2 million per annum. And you spend these 12 lakh rupees in a year itself. You have nothing left but the government will not accept it until you have filed your income tax return.
Income tax will be deducted from your income till you file your income tax return. When you file your income tax return, that is, you give one statement of your income in writing, then you will get the amount of your money deducted as income tax.
Whenever you file ITR, then you give written details of the amount of current financial year you have earned from your job, business or profession. Apart from income, you also provide information on investing in government-determined tax savings option, spending on essentials (about reimbursement or tax exemption on bill submission) and paying advance tax (advance tax).
Who should file an income tax return?
According to the law of the country, the income tax return – ITR every business or person should file. It is also necessary to clarify here that filing income tax return does not mean that taxable people are exempted from paying tax. It has to be kept in mind that there is a difference between filing Income Tax Return (ITR) and paying tax.
What is the difference between filing Income Tax Return ( ITR) and paying tax?
The first difference between ITR and income tax is that even if a person does not come under the purview of filing tax, he can still file income tax returns.
Regularly filing income tax (ITR) benefits the person. A person who files a regular ITR collects evidence of his income. Evidence of income helps him to prove his income. Evidence of income is income proof at the time of the person’s need. Using this proof, a person can apply for a business loan, personal loan or credit card according to his needs.
ITR for Salaried Person
Salaried people use a form a lot to file Income Tax Return (ITR). That form is ITR-1. This form is now available on the e-filing website of the Income Tax Department. In this way, you can easily file ITR on receipt of Form-16 from the company.
ITR-1 for FY 2018-19 is different in many ways. Even the Form-16 has changed this year. According to the Central Board of Direct Taxes (CBDT) notification, the new format of Form-16 will contain more detailed information. For example, more details will have to be given about the allowances which are exempt from tax. Along with this, details of deduction to be claimed from salary income will also be required.
However, unlike last year, you will not need to raise salary slip. The reason is that ITR-1 and Form-16 are synced. This will make it easier to fill in your details.
Here we are telling you what you need to do to fill the salary details in ITR-1 for the financial year 2018-19.
This year, in ITR-1, you have to give salary income details in four sub-heads given below:
- Gross salary
- Allowances covered under section 10
- Net salary
- Deduction
four sub-heads under section 16 The fifth sub-head is ‘Income Chargeable Under the Head Salaries’ when all the data is entered under. This amount will be automatically calculated. Let us look at each sub-head in detail here.
- Gross salary
is divided into this and three components:
(i) salary according to section 17 (1)
(ii) value of allowances according to section 17 (2)
(iii) According to section 17 (3), the
information required in return for salary ITR-1 can be found from Part-B of Form-16.
Part-B of Form-16 starts with ‘Gross Salary’. This item has the same break-ups that are asked in ITR-1. All you need to do is copy the information and enter ITR-1
- Allowances covered under section 10
In this item, you have to tell about all the allowances received from the company which are not fully or partially covered by the tax. Such allowances include House Rent Allowance (HRA) and Leave Travel Allowance (LTA).
In ITR-1 form you have to fill only those allowances which are fully or partially tax-exempt under this section. This information will be available in Part-B of Form 16. It will be seen under ‘Allow to the Extant Exemption under Section 10’.
It has to be understood what kind of allowances come in this item. For this, according to your salary structure, you will need to look for tax-exempt allowances. For example, the dearness allowance is fully taxable. If the entire tax liability is made on any allowance, then it will be added to the salary under section 17 (1).
Similarly, HRA will be taxed if you are not staying on a rented house or are not paying any rent. However, if you live in a rented house, then a portion of the ARA is exempt from tax. The drop-down menu will have 14 options. According to Form 16, in which allowance you get tax exemption.
- Net salary
will automatically calculate the net salary on entering the details in the items mentioned. This amount should match the net salary recorded in Form 16.
- After the deduction
net salary is calculated under section 16, you need to claim the deduction. Only those who get salary can claim deduction under section 16. These deductions include:
- Standard deduction
- Entertainment allowance
- Tax / professional tax on employment
These deductions will be given in Part-B of Form-16. In the financial year 2018-19, you will get a standard deduction of Rs 40,000. Deduction on entertainment allowance is available only to government employees. If you have given any professional tax to the state government, then the amount given can be claimed as a deduction.
- Tax calculation
Once the information is filled in all the rows (Rows), the ITR software automatically performs the tax calculation. It will be seen in ‘Income Chargeable Under the Head Salaries’. This automatically calculated amount should match the amount recorded in Form-16.