The Income Tax Return (ITR) deadline for AY 2022-23 or FY 2021-22 is July 31 for salaried employees whose accounts don’t need to be audited. As only a few days are left, experts suggest that taxpayers should file their ITR as soon as possible before the due date.
There are several components of the CTC of salaried employees that are required for tax calculation.
“First, we need to calculate the Gross Salary from the monthly salary and then we need to deduct exempt allowances (HRA, LTA, etc), Standard deduction (Rs. 50,000) and professional tax (if any) to arrive at a net salary. Thereafter, if there is any other income that can be added to net salary ( like FD interest, lottery income, etc) to arrive at Gross Total Income. After calculating Gross Total Income, we need to deduct Chapter VI-A deductions( Deduction u/s 80C, Deduction u/s 80D, etc) to arrive at taxable income,” Abhishek Soni, CEO and Co-Founder of tax filing platform Tax2win told FE PF Desk.
A number of investments and expenses by salaried employees also qualify as deductions on which tax benefits apply. Here’s a list of such deductions under Section 80C of the Income Tax Act for salaried employees:
1. Under Section 80C, total deduction of Rs 1.5 lakh is available towards payments made to –
- Provident Fund
- Life Insurance Premium
- Subscription to certain equity shares
- Tuition Fees
- National Savings Certificate,
- Housing Loan Principal
- Other various items
2. Under Section 80CCC: Annuity plan of LIC or other insurers towards Pension Scheme
3. Under Section 80CCD(1): Pension Scheme of Central Government
4. Upto Rs 50,000 additional deduction Under 80CCD(1B) for payments made to the Pension Scheme of the Central Government like NPS, excluding the deduction claimed under 80CCD (1).