Income tax is a direct tax levied on the earnings of individuals, including salary, by the Government of India. Salaried individuals must pay tax based on their annual income, as per the tax slabs defined under the Income Tax Act, 1961.

Filing an Income Tax Return (ITR) is important for salaried employees due to the following reasons:

• Legal Requirement: Mandatory if your income exceeds the basic exemption limit.
• Avoid Penalties: Late or non-filing leads to fines and legal consequences.
• Claim Tax Refunds: If excess TDS (Tax Deducted at Source) is deducted, filing ITR helps claim a refund.
• Loan Approvals: Banks require ITR proof for home, personal, and vehicle loans.
• Visa Processing: Many countries ask for ITR as proof of income for visa applications.
• Future Financial Planning: ITR acts as proof of income for investments and credit applications.

Salaried individuals are mainly subject to:

1. Income Tax: Levied on salary and other sources of income.
2. Professional Tax: A nominal tax imposed by some state governments.
3. TDS (Tax Deducted at Source): Deducted by employers from salary before payment.

The applicable ITR forms for salaried employees are:

• ITR-1 (Sahaj): For individuals earning up to ₹50 lakh from salary, pension, and one house property.
• ITR-2: For individuals earning more than ₹50 lakh or having multiple income sources.
• ITR-3: For individuals with business/professional income in addition to salary.

• Without Audit Requirement: 31st July of the assessment year.
• With Audit Requirement (If Additional Business Income Exists): 31st October of the assessment year.

• Legal Compliance: Avoid legal notices and penalties.
• Easy Loan Approvals: Required for home, car, and personal loans.
• Tax Refund Claims: Get back excess TDS deducted by your employer.
• Visa & Immigration Benefits: Essential for international travel and visa applications.
• Financial Record: Acts as an income proof for future financial transactions.