Salary is first source or first head of Income charging under Income Tax Act -1961. It is an important source of revenue to Government too.
When IT dept had introduced e- filing & paperless filing of Income Tax Returns (ITR), it had reduced only procedure/time for filing of tax return. Anyone can file his tax return on line. But e filing did not reduce any Income tax sections applicable to Salary Income.
This article “SECTIONS’ SKELETON OF SALARY ITR “is an effort to write an article which has “all sections applicable to salary income” This is not exhaustive list. This list is an effort to enlighten salaried people/readers with possible applicable sections & to give bird’s view on all these sections.
Any salaried person who is filing his tax return is expected to know & follow the provisions of IT Act while filing his salary -Tax return (ie ITR 1). Ignorance is not an excuse.& wrong application of these sections while filing tax return is not acceptable
Every assessee is need to declare & sign in ITR V (e file) or 2nd page in ITR 1 (Paper filing). It is assumed that every assessee has understood provisions of Income Tax Act 1961 while filing of his tax return. Verification part of Income tax return where an assessee signs while filing his returns (without fail) declare himself that he followed provisions of Income Tax act applicable to him.
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VERIFICATION |
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I, ________ son of _______, holding permanent account number _______ solemnly declare that to the best of my knowledge and belief, the information given in the return and schedules thereto is correct and complete and that the amount of total income and other particulars shown therein are truly stated and are in accordance with the provisionsof the Income-tax Act, 1961, in respect of income chargeable to income-tax for the previous year relevant to the Assessment Year 2010-2011. |
Many times, salaried people will do mistakes (as mentioned below) while filing his tax return. Claiming deductions or exemptions /disclosing incomes by applying wrong sections of Income tax act may result in notice from Income Tax dept. Few examples are :
1) Claiming HRA exemption under Section 80C rather in Section 10(13A).
2) Checking Residential status of an asseessee as Not Ordinary Resident instead of ordinary resident without knowing impact of residential status on Return (section 6)
3) Checking Tax return as “Revised Return “ without knowing provisions of it
4) Claiming 100% deduction on donations u/s 80G when those donations are eligible only for 50%
For easy reading to readers to know what sections applicable to salaried people are listed below, I have also classified all sections in different heads
A) Basic info for identifying the requirement for filing of tax return
1. Section 139 (1) – Person need to file ITR if his Salary Income Exceeds specified exemption
2. Section 271F – Penalty for non filing of ITR
3. Section 2(9) – Definition of Asst Year. In simple words Its year when you file ITR
4. Section 3 – Meaning of “Previous Year”
5. Section 4 – Charging Section which allows IT Dept to Charge Income tax on Income
6. Section 2 (31) - Meaning of word “Person”
7. Section 6 – Related to Residential status
8. Section 2 (24) – Definition of Income, this section includes salary as income. That’s why it is treated as Income for income tax purpose.
9. Section 139A – related to PAN
10. Section 272 (B) - Deliberate misquoting of PAN can result in a penalty of up to Rs 10,000
11. Section 2(7) Definition of Assesssee
12. Section 139(5) – Filing of “Revised return”
13. Section 139(3) - Filing of “Belated Return”
B) Related to Salary Income
14. Section 15 – Types of Salary chargeable to income tax – Due/receipt basis
15. Section 17(1) – Definition of ” Salary”
16. Section 17(2) Definition of Perquisites – Eg – Interest free /concessional loan given to employees
17. Section 17(3) – Definition of profit in lieu of Salary
18. Section 16(2) – Profession Tax deduction
C) Related to exemptions
19. Section 10(13A) – Related to Exemption of HOUSE RENT ALLOWANCE
20. Section 10(14) Conveyance Allowance
21. Section 10(38) – Tax exempt Income
D). Related to Chapter VI deductions
22. Section 80C – Investment Deductions – LIC & ULIP etc investments. It includes Housing Loan Principal repayment
23. Section 80CCC – Limitation to 80C
24. Section 80D – Related to Mediclaim deduction
25. Section 80DD Related to “Specified Diseases” expenses deduction
26. Section 80E – Related to “Education Loan repayment deduction”
27. Section 80G – Related to Donation deduction
28. Section 80U - Related to deduction to “Handicap Assessee”
29. Section 80GG – Deduction in case of Rs 2,000 per month for employee who does not have HRA
E). Related to Tax Computation
30. Section 89- Tax Relief for Arrears of salary
31 Section 90 – Double Taxation relief
32. Section 234A – Interest for defaults in furnishing return of income
33. Section 234B – Interest for defaults in payment of advance tax
34. Section 234C – Interest for deferment of advance tax
35. Section 192 – TDS for Salaries
36. Section 140(a) – Self Assessment of Tax
37. Section 244 - Interest on Refund
F). Related to Assessment
38. Section 142(1) – Serving of notice
39. Section 143 (1) Summary Assessment
40. Section 143 (2) Scrutiny Assessment
41. Section 143 (3) Regular Assessment
H).Special Cases
42. Section 10(10AA) – Related to exemption of Pension
43. Section 10(10) - Related to exemption of Gratuity
44. Section 10 (10AA) (i) - Related to exemption of Leave Encashment
Last but not least, filing of Income Tax return for Salary Income tax return is not a data entry. Please take necessary precaution while filing your tax return & fill your tax return after knowing applicable Income tax sections
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