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AURIGA ACCOUNTING PRIVATE LIMITED Salaried Employees Which ITR Form to File

Who Qualifies as a Salaried Individual for ITR Filing?

For income tax return (ITR) purposes, a salaried person is someone who earns a fixed income from an employer under a formal contract of employment. This income typically includes basic salary, allowances, perquisites, and benefits as outlined under Section 17(1) of the Income Tax Act, 1961. Salaried individuals are required to file an ITR annually, disclosing income details, deductions, taxes paid, and any refunds claimed.

Applicable ITR Forms for Salaried Individuals

Salaried taxpayers generally file ITR-1 or ITR-2, depending on their income sources and other specific conditions.


ITR-1 (Sahaj)

This form is suitable for resident individuals with a total income up to ₹50 lakh from the following sources:

Eligible if income includes:

  • Salary or pension

  • Income from one house property (not involving losses)

  • Income from other sources like interest (excluding winnings from lottery, etc.)

  • Agricultural income up to ₹5,000

  • No foreign income or foreign assets

Not eligible for ITR-1 if:

  • Total income exceeds ₹50 lakh

  • Individual is Non-Resident or Resident but Not Ordinarily Resident (RNOR)

  • Income is earned from more than one house property

  • Has capital gains or income from business/profession

  • Income includes winnings from lottery, gambling, or racehorses

  • Has losses under “Income from Other Sources”

  • Owns foreign assets or earns foreign income

  • Is a director in a company or holds unlisted equity shares

  • Has deferred tax liability on ESOPs from eligible startups

    ITR-2 Form: For Individuals and HUFs Without Business Income

    The ITR-2 Form is meant for individuals and Hindu Undivided Families (HUFs) who do not earn income from business or profession. It is typically used when total income exceeds ₹50 lakh or includes complex sources such as capital gains, multiple house properties, foreign income/assets, or other special circumstances.


    Eligible Scenarios for Filing ITR-2:

    • Income from salary or pension

    • Income from more than one house property

    • Capital gains (both short-term and long-term)

    • Income from other sources, including lotteries, gambling, or horse racing

    • Agricultural income exceeding ₹5,000

    • Foreign assets or income from abroad

    • Total income over ₹50 lakh

    • Holding unlisted equity shares

    • Serving as a director in a company

    • Claiming relief under DTAA (Double Taxation Avoidance Agreement – Sections 90/91)

    • Deferred tax on ESOPs from eligible start-ups

    • Carry-forward or set-off of losses from previous years


    Who Cannot File ITR-2:

    • Individuals or HUFs earning income from business or profession

    • Companies, firms, or trusts

How to File ITR for Salaried Employees

Once you’ve identified the correct ITR form (usually ITR-1 or ITR-2), the next step is to file your income tax return online. Here’s a quick, step-by-step guide to help salaried individuals file their returns with ease:


Step-by-Step Guide to File ITR Online

Step 1: Log in to the e-Filing Portal

Step 2: Start Filing Your Return

  • Go to ‘e-File’ > ‘Income Tax Returns’ > ‘File Income Tax Return’.

Step 3: Select the Assessment Year

  • Choose the applicable Assessment Year (e.g., AY 2024–25).

  • Select the ‘Online’ mode for filing.

Step 4: Choose the Correct ITR Form

  • Select ITR-1 (Sahaj) if your total income is up to ₹50 lakh from salary, one house property, and other sources.

  • If not eligible for ITR-1, opt for ITR-2.

Step 5: Enter Required Details

  • Fill in your personal, income, and deduction details.

  • Include income from salary, house property, and other sources.

  • Claim deductions under sections like 80C, 80D, etc. as applicable.

Step 6: Review and Submit

  • Cross-check all entries carefully.

  • Submit your return electronically.

Step 7: Complete e-Verification

  • Verify the return using Aadhaar OTP, Net Banking, or EVC.

  • e-Verification is mandatory to complete the filing process.

Comparison Between ITR-1 and ITR-2 Forms for Salaried Employees

  • Here’s a quick comparison of the ITR-1 (Sahaj) and ITR-2 forms for salaried employees based on key factors:

    AspectITR-1 (Sahaj)ITR-2
    Income SourcesSalary, one house property, interest income, agricultural income up to ₹5,000Salary, multiple house properties, capital gains, foreign income/assets, agricultural income over ₹5,000
    Income ThresholdTotal income up to ₹50 lakhTotal income exceeding ₹50 lakh
    Residential StatusOrdinarily Resident IndianAny residential status (including Non-Resident)
    ComplexitySimple form, requires less informationMore detailed, requires additional information
    Eligibility ExclusionsNot applicable if there is income from business/profession, capital gains, or foreign assetsNot applicable if there is income from business/profession

Common Mistakes to Avoid While Filing ITR for Salaried Persons

Filing your Income Tax Return (ITR) accurately is crucial for salaried individuals to ensure compliance and avoid complications. Here are some common mistakes to watch out for when filing your ITR:

  1. Incorrect Personal Information
    Ensure that your name, PAN, Aadhaar number, address, email ID, and mobile number match the details in your PAN records. Even small discrepancies can delay the processing of your return or result in rejection.

  2. Choosing the Wrong ITR Form
    One of the most frequent mistakes is selecting the wrong ITR form. It’s important to identify the correct form based on your income sources and tax filing requirements to avoid errors.

  3. Failure to Report All Sources of Income
    Make sure to report all your income sources, including salary, interest income, capital gains, or income from any other sources. Double-check that your ITR aligns with your Form 16, Form 26AS, and the Annual Information Statement (AIS) to ensure accurate reporting.

  4. Not Claiming Eligible Deductions
    Many salaried individuals overlook deductions available under sections like 80C, 80D, and 80TTA, which can help reduce taxable income. Be sure to claim all eligible deductions to minimize your tax liability.

  5. Late Filing or Non-Filing
    Filing after the due date may result in penalties and interest, and it can also limit your ability to carry forward certain losses. Avoid the rush and file your return on time to stay compliant and avoid unnecessary costs

About the Author

  • Muskan

  • Muskan is a seasoned content writer with expertise in business registration, tax regulations, trademark laws, and company compliance. Through his well-researched and practical articles, he provides businesses with clear and actionable guidance, helping them navigate complex legal and regulatory landscapes with ease

August 2, 2025

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