What Is Income Tax for a Salaried Individual?
Income Tax is a direct tax charged by the Government of India on the income earned during a financial year. For a salaried individual, income tax is calculated on salary received from an employer after allowing eligible exemptions, deductions, and rebates under the Income Tax Act, 1961.
Although employers deduct TDS (Tax Deducted at Source) every month, filing an Income Tax Return (ITR) is mandatory to:
- Declare actual income
- Claim deductions and exemptions
- Receive refunds (if excess tax is deducted)
- Stay legally compliant
Who Is Treated as a Salaried Individual?
You are considered a salaried individual if:
- You earn income from an employer–employee relationship
- Salary is paid monthly or periodically
- You receive Form 16 from your employer
This includes:
- Private sector employees
- Government employees
- Contractual employees with salary structure
Components of Salary Income
Salary income may include:
- Basic Salary
- Dearness Allowance (DA)
- House Rent Allowance (HRA)
- Special Allowances
- Bonus & Incentives
- Perquisites (PF contribution, accommodation, car, etc.)
Income Tax Regimes for Salaried Individuals
Old Tax Regime
- Allows exemptions and deductions
- Suitable for those with tax-saving investments
Key benefits:
- Standard Deduction
- Section 80C (PF, LIC, ELSS, PPF)
- Section 80D (Health Insurance)
- HRA & LTA benefits
New Tax Regime
- Lower slab rates
- Most exemptions and deductions not allowed
👉 Salaried taxpayers must select the tax regime while filing ITR.
Step-by-Step Process to File Income Tax Return (Salaried Individual)
Step 1: Gather Required Documents
- PAN Card
- Aadhaar Card
- Form 16 (issued by employer)
- Bank account details
- Investment proofs (if opting old regime)
- Home loan interest certificate (if applicable)
Step 2: Calculate Your Total Income
Add:
- Salary income
- Income from other sources (interest, dividends, etc.)
Subtract:
- Exempt allowances
- Standard deduction
- Eligible deductions (Old Regime)
Step 3: Choose the Correct ITR Form
- ITR-1 (Sahaj) – Salary income up to ₹50 lakh
- ITR-2 – Salary income with capital gains
Most salaried individuals file ITR-1.
Step 4: Login to Income Tax Portal
- Visit the official income tax e-filing portal
- Login using PAN as user ID
Step 5: Select Assessment Year
- Choose the correct Assessment Year (AY)
- Select “File Income Tax Return”
Step 6: Fill Income & Deduction Details
- Verify auto-filled salary details
- Match TDS with Form 16 and AIS
- Enter deductions and exemptions carefully
Step 7: Review Tax Computation
- Check tax payable or refund amount
- Pay self-assessment tax if required
Step 8: Submit the ITR
- Submit return online
- Select verification mode
Step 9: E-Verify the Return
- Aadhaar OTP (most common)
- Net banking
- Electronic Verification Code (EVC)
⚠️ ITR is invalid without e-verification
Important Due Dates for Salaried Individuals
- 31st July – Original return filing
- 31st December – Belated return
- 31st December – Revised return
(Dates may change as per government notifications)
Benefits of Filing Income Tax Return
- Claim refunds on excess TDS
- Proof of income for loans & visas
- Avoid penalties and notices
- Carry forward losses
- Maintain clean financial records
Common Mistakes to Avoid
- Not matching Form 16 with AIS
- Selecting the wrong tax regime
- Forgetting to e-verify ITR
- Claiming incorrect deductions
- Using the wrong ITR form
Why File Income Tax with Saving Mantra?
- Expert-assisted ITR filing
- Regime comparison for maximum savings
- Error-free compliance
- Faster refunds
- Complete digital support
Disclaimer
This article is for informational purposes only and does not constitute legal or tax advice. Income tax laws are subject to change and depend on individual circumstances. Saving Mantra recommends consulting a qualified tax professional before filing your income tax return.