How to File ITR for Salaried Employees: Step-by-Step Process

For most salaried employees with income from salary, one house property, and other sources like interest, the correct form is ITR-1 (Sahaj). You can use ITR-1 if your total income does not exceed ₹50 lakh and you do not have any capital gains, foreign assets, or income from business or profession.

If you have income from capital gains (e.g., selling shares or mutual funds), or if you have more than one house property, or if your total income exceeds ₹50 lakh, you must use ITR-2. If you have income from a business or profession (including freelancing), you need ITR-3 or ITR-4, depending on your turnover.

To confirm which form applies to you, refer to the Income Tax Department's official guidelines on the e-filing portal. Using the wrong form can lead to a defective return, which the department will ask you to correct.

Before you begin, gather the following documents to ensure a smooth filing process:

• Form 16: Issued by your employer. It contains your salary details, tax deducted at source (TDS), and any exemptions claimed.
• Form 26AS: Available on the TRACES portal or your e-filing account. It shows all TDS deducted on your behalf, including from salary, bank interest, and other sources.
• Bank statements: For interest earned on savings accounts, fixed deposits, and recurring deposits.
• Investment proofs: Receipts for deductions claimed under Section 80C (e.g., PPF, ELSS, life insurance premiums), Section 80D (health insurance), Section 80G (donations), and others.
• Home loan certificate: If you have a home loan, you need the interest and principal repayment certificates from your lender.
• Aadhaar and PAN card: For identity verification and e-verification of the return.

Having these documents ready will help you accurately report your income and claim all eligible deductions.

Follow these steps to file your ITR on the Income Tax Department's e-filing portal (incometax.gov.in):

1. Log in to the e-filing portal: Use your PAN as the user ID and your password. If you are a first-time user, register using your PAN.
2. Navigate to 'e-File' > 'Income Tax Return': Select the relevant Assessment Year (e.g., AY 2025-26 for income earned in FY 2024-25).
3. Choose the correct ITR form: Select ITR-1 or ITR-2 as applicable.
4. Select the filing mode: Choose 'Online' (you fill the form on the website) or 'Offline' (you download the utility, fill it, and upload the JSON file). For most users, the online mode is simpler.
5. Pre-fill the return: Click on 'Let's Get Started' and then 'Start New Filing'. The portal will pre-fill your personal details, salary income from Form 16, TDS from Form 26AS, and some other information. Review and correct any errors.
6. Add other income: Enter income from other sources like bank interest, rental income, or capital gains.
7. Claim deductions: Under the 'Deductions' section, enter all eligible deductions under Chapter VI-A (80C, 80D, etc.) and any other applicable deductions.
8. Calculate tax: The portal will automatically calculate your total tax liability. If you have already paid tax via TDS or advance tax, it will show the amount payable or refundable.
9. Verify and submit: Review the entire return. If everything is correct, click 'Preview and Submit'. You will be asked to choose a verification method.

Verification is mandatory for the Income Tax Department to process your return. You can verify your ITR in the following ways:

• E-Verification using Aadhaar OTP: This is the most common and instant method. An OTP is sent to your mobile number registered with Aadhaar. Enter the OTP on the portal to complete verification.
• E-Verification using Net Banking: If your bank account is linked to your PAN, you can verify through your bank's net banking portal.
• E-Verification using Demat account: Through your stockbroker's portal.
• Sending a signed physical ITR-V: If you cannot e-verify, you must print the ITR-V form, sign it, and send it to the Centralized Processing Centre (CPC) in Bengaluru within 120 days of filing.

Once verified, the department will process your return, and any refund due will be credited to your bank account. You can check the status on the e-filing portal under 'My Account' > 'Income Tax Returns'.

Avoid these frequent errors to prevent notices or delays:

• Not reconciling Form 26AS: Ensure all TDS shown in Form 26AS matches your Form 16 and other income. If there is a mismatch, contact your employer or the deductor.
• Omitting interest income: Interest from savings accounts, fixed deposits, and recurring deposits is taxable. Even if TDS is not deducted, you must report it. Interest up to ₹10,000 on savings accounts is deductible under Section 80TTA.
• Claiming incorrect deductions: Only claim deductions for which you have valid proof. For example, you cannot claim 80C for an investment you did not make.
• Choosing the wrong tax regime: You can choose between the old tax regime (with deductions) and the new tax regime (with lower rates but no deductions). Compare your tax liability under both regimes before selecting.
• Filing without verification: An unverified return is considered not filed. Always complete the verification step.

If you have all your documents ready and are comfortable with the process, you can file your ITR online using the steps above. However, if you have complex income sources (capital gains, foreign assets, multiple properties) or are unsure about deductions, consult a qualified chartered accountant or tax professional to avoid errors.

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This page provides preliminary information. It is not legal advice. For your matter, consult a qualified professional.