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How to file salary details in ITR-1 and ITR-2?

Filing the Income Tax Return is an imperative responsibility of every individual. Not only it is mandatory by law, but also because it is the duty of every citizen, to be honest and regular in paying his taxes. These taxes are directly related to the progress that the country makes. After all, it is the money of the taxpayer that helps the government to function properly.

But there is still a large population of people who are not well aware of the ways to file their taxes. If you too struggle to find out how to file salary details in ITR 1 and ITR 2, read on.

Most of them either don’t know under which category of the IT Return they fall in or many of them don’t know how it is done. Many people consider filing the returns to be a tedious and difficult task. But filing the IT return is no rocket science. In this article, we will discuss how to file salary details in ITR 1 and ITR 2.

When it comes to filing your IT Returns, it is important for you to know what forms are to be filled. What forms you are required to fill is dependent on the type of income, your annual income and the exemptions that you are eligible for. Learning about them before you file your taxes, will help you perform the procedure correctly, which will not only save your time and effort but would also give you peace of mind. So, before we learn how to file salary details in ITR 1 and ITR 2, let us first understand which out of the two you need to fill.

Income Tax Return-1

ITR 1 form is to be filled when you are/have any of the following:

  • Salaried employee
  • Receive a pension
  • Earnings from 1 house property
  • Earning a tax-free income
  • Earning from other sources (excluding Winning from Lottery and Income from Race Horses)

You cannot fill ITR 1 when you are/have any of the following:

  • An entrepreneur or earning from a business or profession
  • Earning from more than 1 properties
  • Earning through activities like the lottery, gambling etc.
  • Earning through taxable capital gains
  • Have an exempted agricultural income that is over INR 5,000
  • Total income exceeds Rs 50 lakhs.

Income Tax Return-2

ITR-2 form is to be filled when you are/have any of the following:

  • Salaried employee
  • Pensioner
  • Earning from more than 1 house property
  • Earning a tax-free agricultural income of more than INR 5,000
  • Earning through activities like lottery, gambling etc.
  • Earning through capital gains

You cannot fill ITR-2 when you are/have any of the following:

  • An entrepreneur or HUF with income from a business or an occupation
  • Are eligible under ITR-1 Form

Documents Required for Filing ITR1 and ITR 2:

In a financial year, the last day to file your Income Tax Return is July 31. Being aware of the decline, helps us being prepared and planning better. You have time to gather the documents and if you do this on time, the filing can be done in a smooth and hassle-free manner.

Salaried Employees

As a salaried employee, you would need to have

  • PAN Card
  • Employer issued Form 16.

Interest Income related Documents

  • Your bank statement or a passbook that shows how much interest you have received on your savings account
  • Statement for the interest that you have received on your fixed deposits
  • Bank issued TDS Certificate

Form 26AS

Form 26AS is provided by the Income Tax Department and can be downloaded from the official website of the IT Department. This is a summary or an overall view of the income tax that has been paid by you during a financial year. It shows the different taxes that are subtracted from your income.

Documents related to investments made under Section 80

Documents of investments that qualify for deduction under Section 80, such as PPF, ELSS, LIC premium certificates, etc.

A few of the Required Documents for claiming Deductions

The following documents must be kept handy:

  • Contribution to Provident Fund
  • Tuition Fee paid for children
  • Payment towards life insurance
  • Registration and stamp-duty charges
  • Payment towards home loan

Other Documents

  • The interest that is paid towards the home loan
  • Interest paid towards Education loan
  • Stock Trades within the financial year can be taxed under the Capital Gains

A Few Tips for Filling Salary Details in ITR1 and in ITR 2:

  • To file the ITR 1, the taxpayer is required to give a detailed break-up of their salary and the income from the house property, if there is any.
  • The deadline to file the ITR is 31 August. After this, a late fee of INR 5,000 is to be paid when filing the ITR before 31 Dec 2018. If you file your ITR after this, you can do so by paying a fine of INR 10,000. Remember that the financial year starts on 1 April and ends on 31 March.
  • The entire salary would not be fully taxable, certain parts would be completely tax-free while some may be exempted partially. You must keep all your salary and investment related documents safely and handy.
  • If you have switched your job, then you must obtain the salary statements and Form 16 from your old employer. You need to consolidate the salary that you have earned from all ex-employers.
  • Download Form 26AS beforehand and go through it in detail to understand what details are to be provided and what documents are to be attached. This will save you time and effort when filing the ITR.
  • Under Section 16, there are some deductions that are allowed from the GSI, Gross Salary Income. You can claim the Entertainment Allowance and the Tax on Employment.
  • If you possess a house property you will be required to mention the amount that is chargeable.
  • As per the guidelines of the Supreme Court, it is compulsory for everyone who is filing the ITR online, to quote his/her Aadhar. You need to mention your 12 digit Aadhar Card number or the 28-digit Aadhar enrolment number.
  • In order to simplify the filling of ITR, the CBDT (Central Board of Direct Taxes) made some alterations in the Forms. Previously there were 9 forms, they have been reduced to 7. ITR 2, ITR 2A and ITR 3 have been streamlined. Now Form ITR 2 alone has been put in place of them.
  • Remember to mention all your Bank Account details including bank account number and their IFSC Code.
  • As per the new mandatory disclosure if you have deposited INR 2 lakh or more in an account, when you are filing your ITR you need to mention source of the money deposited, bank account details like name, IFSC code and account number of the bank.

How to Fill in Schedule S of Income Tax Return ITR2

  • Salary : You must exclude all exempted as well as non-exempted allowances, the perquisites and profits that are made in lieu of salary in the Schedule S of Gross Salary in form 16.
  • Allowances : A total of all the allowances that are exempted under Section 10, such as the HRA, House Rent Allowance and TA, Transport Allowance.

  • Value of Perquisites : Wherever applicable, Value of Perquisites under section 17(2) 21600.00 (as per Form No:12BA) has to be mentioned in Form 16.

  • Profits: Wherever applicable Profits that have been made in lieu of the salary under section 17(3) 0.00 (as per Form No: 12BA) have to be mentioned in Form 16.

Tips to Fill Schedule S in ITR-2

Tips to Fill Schedule S in ITR-2 When HRA Has Been Claimed

As a salaried individual, you need to keep your Form 16 prepared for reference when you fill in your salary details. You must also check if the salary that you receive includes a Professional Tax in it or not. For most professionals, this is a flat amount of INR 2,400 to 2,500 each year.

Tips to Fill Schedule S in ITR-2 when HRA Has Not Been Claimed

In case your HRA is not mentioned despite you being eligible, then you have to calculate the House Rent Allowance by making use of the formula that is mentioned in Form 10 under section 10. The least of the following should be preferably claimed as the HRA.

  1. Actual HRA that is received
  1. 50% metro city or 40% for non-metro city, of the Basic Salary
  1. Rent Paid subtracted from 10% of the salary.

For example, in case your LTA is INR 50,000, the HRA comes to INR 1 lakh. The allowance exempted is INR 1.5 lakhs under the Income Tax Act.

Frequently Asked Questions

I missed filing my return what do I do?

The last date to file the ITR in 2018 was 31 Dec 2018 by paying a late fee of INR 5,000. There is still time to file the returns for the financial year 2017-2018, you can file it before 31 March 2019 by paying a fine of INR 10,000. Remember that the financial year 2017-2018 ends on 31 March 2019.

Is it necessary to mention my Aadhaar details when filing ITR?

Yes, it is necessary.

My Aadhar card is still not verified, can I file ITR?

Yes, you can. Mention the 12-digit Aadhar enrolment number.

What are allowances?

Allowances are the fixed and systematic payments that are paid to an employee, over and above his salary for the purpose of meeting the employer's requirements.

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