Income Tax Return for Salaried Individual (Form 1 & 2)

As per income tax laws, ITR must be mandatorily filed if a resident individual's gross total income (i.e. total income before deduction u/s 80C to 80U) during the financial year exceeds the basic exemption limit. The basic exemption limit for an individual depends on his/her age. For FY 2020-21, the basic exemption limit is as follows:

• Age below 60 years                         Rs 2,50,000/-
• Between 60 years and 80 years (Senior citizen) Rs 3,00,000/-
• 80 years and above (Super senior citizen) Rs 5,00,000/-

A Financial Year (FY) is the period between 1 April and 31 March – the year in which you earn an income. The assessment year (AY) is the year that comes after the FY. This is the time in which the income earned during FY is assessed and taxed.

Example: For period 1^st April 2020 to 31^st March 2021, the FY will be FY 2020-21 and the Assessment Year will be AY 2021-22

• The last date for filing the income tax return is generally on 31 July of the assessment year (AY). The ITR must be filed for income earned from 1 April 2020 to 31 March 2021, latest by 31 July 2021 unless extended by the government.

The penalty for late filing of tax returns for is Rs 5,000 (on filing the return after the due date but on or before 31st December) and INR 10,000 (on the filing of return after 31st December to 31st March).

80C allows deduction for investment made in PPF , EPF, LIC premium , Equity linked saving scheme, principal amount payment towards home loan, stamp duty and registration charges for purchase of property, Sukanya smriddhi yojana (SSY) , National saving certificate (NSC) , Senior citizen savings scheme (SCSS), ULIP, tax saving FD for 5 years, Infrastructure bonds etc.

Yes, both husband and wife can claim the deduction for interest and principal, provided the property is jointly owned and the loan is also jointly taken by both. The deduction will be available in ratio of ownership of property.

Yes, the additional deduction of Rs. 50,000/- under Section 80CCD(1B) is available to assessee over and above the benefit of Rs. 1.50 Lakhs available as a deduction under Sec 80C.

Yes the deduction can be claimed while filing of income tax return.

Yes, it is mandatory to report all incomes in the income tax return. It does not matter whether the income is exempt from tax or taxable. Correct and complete reporting of all types of incomes is essential to calculate accurate tax liability and file correct income tax return.

The following are the deductions and exemptions you cannot claim under the new tax system:

1. The standard deduction of Rs 50,000, professional tax and entertainment allowance on salaries
2. Leave Travel Allowance (LTA)
3. House Rent Allowance (HRA)
4. Minor child income allowance
5. Helper allowance
6. Children education allowance
7. Other special allowances [Section10(14)]
8. Interest on housing loan on the self-occupied property or vacant property (Section 24)
9. Chapter VI-A deduction (80C,80D, 80E and so on)
10. Deduction from family pension income

Decision for which regime is better can only be made on the basis of facts and details of the case. Depending on which investments have been made by the assessee, the decision can be made as to which tax regime will involve lower tax expense for the assessee.

Yes, a salaried taxpayer can opt-in and opt-out of tax regime every year. That means salaried assesse can choose the new tax regime in one year and choose the regular tax regime in another year.

Yes the assesses can change the tax regime at the time of filing of income tax return.