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This article talks about how to fill Salary details from one employer only by an individual in Income Tax Return, ITR1 and ITR2. Individuals who were earlier asked to provide only the taxable amount of salary in ITR1 are now required to provide the break-up of their salary such as allowances, not taxable, perquisites etc in ITR1 for FY 2017-18. There is no change for filling Salary Details in ITR2 from last year.

The last date to find ITR for income earned between 1 Apr 2018 to 31 Mar 2019 i.e FY 2018-19 or AY 2019-20 is 31 Jul 2019. Then one can file till 31 Mar 2020 but with a penalty.

AADHAAR CARD is Compulsory FOR TAX FILING

Before Filing Salary Details in ITR for AY 2019-20

Salary details to be filled in for FY 2018-19 or AY 2019-20 is simpler than last year AY 2018-19. Filling Allowances not exempt in  FY 2017-18 or AY 2018-19 was not direct. One just needs to get the details from Form 16 and Form 12BA.  Exempt Allowances like HRA, LTA are now in Salary Details section.

Income tax return ITR for salaried in FY 2017-18 required taxpayers to provide full details of their salary income i.e the break-up of their salary such as taxable allowances, allowances not taxable.  Note that Salary consists of BASIC SALARY + TAXABLE ALLOWANCES + EXEMPT ALLOWANCES+ Values of Perquisites+ profits in lieu of salary+Deductions u/s 16 as shown in the table below.

Changes for FY 2018-19 that you have to be aware of are which we have covered in detail in our article ITR for FY 2018-19 or AY 2019-20: Changes, How to file

  • For Salaried and Pensioners Standard Deduction of Rs 40,000 is available,
  • New Section 80TTB for senior citizens for interest on FD etc and
  • Long Term Capital Gain (LTCG) on equity

ITR1 For FY 2018-19, salary details, Standard deduction

ITR1 For FY 2018-19, salary details, Standard Deduction

Fill Salary details in ITR

Salary break up details in ITR1 for FY 2017-18 or AY 2018019

Instructions to fill the Salary details from Income Tax Department in ITR1 is shown in the picture below. So if you have more than 1 Form 16 for this year, you need to calculations as explained in our article How to Fill ITR when you have multiple Form 16

Instructions in ITR2 to fill salary

Instructions in ITR1 to fill salary

Documents needed before filling Salary Details

To fill the salary details in ITR one needs

  • Form 16 issued by the employer. Form 16 is the proof given by an employer to all its employees with the complete details of income (salary), the amount deducted as income tax (TDS) for each month and the total tax payment.
  • Form 12BA: Form 12BA is a statement showing particulars of perquisites, other fringe benefits or amenities and profits in lieu of salary. Perquisites are benefits provided by the employers in addition to the normal salary at a free of cost or concession rates such as Free Meals, Gifts, vouchers etc, Interest-free or concessional loans, RSU or ESPP by the employer. Details about Form 12BA can be found here and about perquisites here.
  • Pay Slip to find Basic Salary.

Note:

  • If you have not been able to claim the exemptions (HRA allowance), deductions (as in 80C, 80D), the certificate showing the principal and interest breakup on loan on house property please keep information handy as you can claim these deductions while filing your Income Tax Return. One is required to submit details of the home loan to employer based on Home loan certificate from the bank. Our article Submitting Home Loan Interest Proof to the Employer with PAN of Lender covers it in detail.
  • Provisional home loan certificate showing break up.

    Provisional home loan certificate showing break up.

  • Before filing Please Verify that TDS mentioned in Form 16 matches TDS information in part A of Form 26AS. as shown in the image below Salary details are in Part A of Form 26AS. Excerpt of Form 26AS is shown below(It shows for the year 2012-13. You should check for FY 2018-19 or AY 2019-20) Our article What to Verify in Form 26AS? explains how to view the Form 26AS, what exactly to verify in Form 26AS with the Form 16, Form 16A issued and Advance Tax, Self Assessment Tax paid.

Match Form 16/Form16A entries with PartA of Form 26AS

Match Form 16/Form16A entries with PartA of Form 26AS

Our article Understanding Form 16: Part I,Understanding Form 16: Chapter VI-A DeductionsUnderstanding Form 16 – Part 3 explains it in detail.

How to Fill Salary Details in ITR1, ITR2 etc

Income tax return ITR1 for FY 2018-19 requires taxpayers to provide full details of their salary income. Individuals can now fill information from Form 16 and Form 12BA.

In ITR1  one needs to fill Schedule (or section) S, Income from Salary is shown below. All the details can be found in Form 16 and form 12BA for perquisites. Fill in details as shown below.

  • Fill in row a Salary as per section 17(1) in Schedule S from (a) Salary as per section 17(2) in Form 16. In the image shown below, it is 8,50,447
  • Fill in row b Value of Perquisites as per Section 17(2) from  (b) Value of perquisites under section 17(2)(as per Form No:12BA, wherever applicable) in Form 16. In the image shown below, it is 4840
  • Fill in row c Profits in Lieu of Salary as per Section 17(3) from (c) Profits in lieu of salary under section 17(3) (as per Form No:12BA, wherever applicable). In the image shown below, it is 0.
ITR fill salary details from Form 16

ITR fill salary details from Form 16

Fill in Exempt Allowances in ITR1, ITR2 etc

Select the drop-down and choose the Exempt Allowances mentioned in your Form 16. Other than HRA which you can claim while filing ITR if you missed providing details to your employer,  Common Exempt allowances are given below. For List of benefits available to Salaried Persons and sections, you can check the Income Tax webpage here Please claim those exempt allowances which appear in your Form 16. You can claim HRA while filing ITR. You CANNOT claim LTA while filing ITR.

Exempt allowances in ITR

Exempt allowances in ITR

The image below shows the ITR with Exempt Allowances filled from Form 16.

Exempt allowances in ITR

Exempt allowances in ITR

  • Section 10(5)  Leave Travel Concession LTC or LTA: An employee can claim exemption under section 10(5) in respect of Leave Travel Concession.
    The exemption under section 10(5) is available to all employees (i.e. Indian as well as foreign citizens).
    The exemption is available in respect of the value of any travel concession or assistance received or due to the employee from his employer (including former employer) for himself and his family members in connection with his proceeding on leave to any place in India.
  • Section 10(13a) –HRA Exemption: HRA is partially exempted. An allowance granted to a person by his employer to meet expenditure incurred on payment of rent in respect of residential accommodation occupied by him is exempt from tax to the extent of least of the following :House Rent Allowance actually received by the assessee
    Excess of rent paid less 10% of salary* due to him
    An amount equal to 50% of salary due to assessee
  • Section 17(2) Medical Reimbursement and Conveyance Allowance: Has been removed. It is now covered under Standard DeductionEarlier one could submit bills for medical expenses to the employer and claim reimbursement. From FY 2018-19 this has been removed. Medical allowance and medical reimbursement are two different things.
  • Fill in row numbered v Deduction u/s 16 in Schedule S a from in Form 16. It includes Allowances such as Entertainment Allowance and Tax on Employment. In above example, it is 2400.

Fill Deductions in ITR

The standard deduction is essentially a flat amount subtracted from the salary income before calculation of taxable income. The maximum amount of standard deduction that can be claimed by a salaried individual/pensioner is Rs 40,000 for the financial year 2018-19,  as shown in the image below (It was increased to 50,000 Rs for FY 2019-20 announced in the budget 2019 which is applicable from 1 Apr 2019)

Fill ITR with deductions from Form 16

Fill ITR with deductions from Form 16

Understanding Salary

Money that is received under Employer-Employee relationship is called as Salary. If one is a freelancer or are hired by an organization on contract basis, their income would not be treated as salary income.( In such case your income would be treated as income from business and profession). The salary consists of following parts

Basic Salary: This is the core of salary, and many other components may be calculated based on this amount. It usually depends on one’s grade within the company’s salary structure. It is a fixed part of one’s compensation structure.

Allowance: It is the amount received by an individual paid by his/her employer in addition to salary to meet some service requirements such as Dearness Allowance(DA), House Rent Allowance (HRA), Leave Travel Assistance(LTA) , Lunch Allowance, Conveyance Allowance , Children’s Education Allowance, City compensatory Allowance etc.  Allowance can be fully taxable, partly or non taxable.

Perquisite: Is any benefit or amenity granted or provided free of cost or at concessional rate such asRent free unfurnished house, Rent free furnished house, Motor car facility, Reimbursement of Gas, Electricity & Water, Club facility, Domestic Servant Facility, Interest Subsidy on Loan , Reimbursement of medical bills, Reimbursement of Hospital bills, Reimbursement of telephone bills, Benefits derived by employee stock option, and so on. Form 12

Example of Payslip which shows Basic Salary

Example of Payslip which shows Basic Salary

How tax affect the various components of salary

Component of Salary(per annum or p.a) Amount Tax Taxable Amount Exempt
Basic Salary 480,000 Full amount is taxable 480,000 0
Dearness Allowance  48,000 Depends on company policy. Mostly fully taxable.  48,000 0
House Rent Allowance  96,000 Applicable if living in a rented house. Minimum of three amounts (Note:Calculation shown below) 52,800  43200
Conveyance Allowance  22,200 Conveyance allowance of Rs 9,600 per annum is exempted from tax. If salary component is more than 9,600, the remaining part is taxable.In this case:22,200-19,200=3000 Starting FY 2015-16, this limit has been increased to Rs.19,200 per annum.  3000 19,200
Entertainment Allowance  12,000 Depends on company policy. Mostly fully taxable. 12,000 0
Overtime Allowance  12,000 Fully taxable 12,000 0
Medical Reimbursements  15,000 If substantiated with bills, are exempt to a limit of Rs 15,000 annually         0 0
Gross Salary 6,75,000 Gross Taxable Salary 6,07,200  

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Disclaimer: Please use the article the for informational purpose only.

Hope this article helped you to fill in the salary details using Form 16 and Form 12BA. if you want something missing do let us know. If it helped you then please leave a comment. It would mean a lot to us. If you found this article helpful, please share the link on Facebook/Twitter.

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