Filing an Income Tax Return (ITR) for Salaried Employees during Work from Home 2021: Income tax filing season has begun. This year, the government launched a new e-filing portal to facilitate tax filing for all categories of taxpayers. In normal times, the deadline for filing an ITR for salaried taxpayers remains July 31 of each year. However, due to the Covid pandemic, the deadline has been extended to September 30, 2021, this year.
Amid the lockdown, a large number of salaried employees are doing work from home. For these salaried taxpayers, there are some necessary rules that you should know.
Form No. 16 and income tax return (ITR)
Sujit Bangar, the founder of Taxbuddy.com, said that if a salaried employee's income exceeds Rs 2,50,000, he must pay income taxes above this limit. Therefore, the employer deducts income tax (TDS) from salary and government deposits. The employer provides details of this taxable income, deductions, and taxes payable to the employee on a specific form known as Form 16.
Bangar said that this year, the employer must deliver Form 16 to employees by July 15. It should be noted that this is not an ITR. You can use this form to submit your ITR. The data mentioned in this form depending on what you have provided to your employer. Your taxable income can be higher or lower than on Form 16, as long as you have documentary evidence against your claims. "
New Tax System versus Old Tax System
Beginning with this ITR (for the fiscal year 2020-21), taxpayers have the option to choose between the old and new tax rates.
Bangar said the new tax rates are lower than the old ones. However, if you choose new tax rates, you cannot claim any tax deductions to reduce your taxable income. You must choose a tax system in which your tax liability is less. The choice of the new tax regime must be specifically specified in the ITR form.
Deductions specific for salaried employees
There are some exemptions and deductions for salaried employees who work from home.
This is a standard deduction of Rs 50,000, various allowances such as education allowances, expense-related allowances, etc. The most important allowance is the House Rent Allowance (HRA), which must be carefully calculated on your ITR. Discounts on PF, gratuity, and NPS are very important.
LTC coupon system
For the 2020-2021 fiscal year, Bangar said the government has relaxed the rules regarding Leave Travel Allowance for salaried employees in both the government and the private sector. As an employee, if you receive LTA on your paycheck and are unable to travel due to COVID, you can still claim these exemptions by spending according to the LTC voucher scheme. The maximum tax exemption is Rs 36,000 per person in the employee's family or one-third of the amount spent on goods and services subject to GST, whichever is less.
Interest on late ITR filing
This year, the ITR filing date has been extended to September 30, 2021. However, if the self-assessment tax after covering the TDS amount exceeds Rs 1 lakh, you may be charged interest for filing after July 31. So it is better to file your ITR before July 31, in case your tax liability even after TDS is more than Rs 1 lakh, Bangar said.
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