Income Tax Return (ITR) filing for salaried employees during work from home 2021: The Income Tax filing season has started.
Income Tax Return (ITR) filing for salaried employees during work from home 2021: The Income Tax filing season has started. This year, the government has launched a new e-filing portal to make tax filing easy for all categories of taxpayers. In normal times, the due date for ITR filing for salaried taxpayers remains 31st July of every year. However, due to the Covid pandemic, the due date has been extended to 30th September 2021 this year.
Amid lockdowns, a large number of salaried employees are working from home. For such salaried taxpayers, there are some necessary rules they should be aware of. Take a look:
Form No. 16 and Income Tax Return (ITR)
Sujit Bangar, Founder Taxbuddy.com, said if the income of a salaried employee crosses Rs 2, 50,000, he needs to pay tax on the income above this limit. Therefore, your employer deducts income tax (TDS) from salary and deposits with Government. The details of such taxable income, deductions and TDS are provided by the employer to an employee in a specific form which is known as Form 16.
Bangar said that this year, employer is required to issue Form 16 to employees before 15th July. “It should be kept in mind that this is not an ITR. You may use this form for filing your ITR. The details mentioned in this Form as per those you have submitted to your employer. Your taxable income may be more or lesser than that in Form 16 provided you have documentary proofs against your claims.”
New Tax Regime vs Old Tax Regime
From this ITR (for financial year 2020-21), taxpayers are given the option to choose between old tax rates and new tax rates.
Bangar said that new tax rates are lesser than old tax rates. However, if you choose new tax rates, you cannot claim any tax deductions to reduce your taxable income. You should choose the tax regime where your tax liability is lower. The choice of New Tax Regime must be specifically indicated in ITR Form.
Deductions Specific for Salaried Employees
There are some exemptions and deductions specific to salaried employees.
These are Standard Deduction of Rs.50,000, various allowances like education allowance, expense related allowances etc. Most important allowance is House Rent Allowance (HRA), which must be computed carefully in your ITR. The deductions on PF, gratuity and NPS are very important.
LTC Voucher Scheme
For FY 2020-21, Bangar said the Government relaxed rules regarding claims for Leave Travel Allowance for salaried employees in Government and private sector both. As an employee, if you are receiving an LTA in your salary and you could not go on travel because of covid, you can still claim such exemptions by spending as per LTC Voucher scheme. The maximum limit for tax exemption is Rs.36, 000 per person in the employee’s family or one-third of the amount spent on such GST liable goods and services whichever is lesser.
Interest for filing late ITR
This year, the date for filing ITR is extended to 30th September 2021. However, in case your self assessment tax after covering of TDS amount is more than Rs 1 lakh, then you may be charged interest for filing beyond 31st July. Therefore, it is better to file your ITR before 31st July, in case your tax liability even after TDS is more than Rs.1 lakh, said Bangar.