Salaried employees! Know these important income tax filing rules
Since the government has extended the income tax return (ITR) filing deadline for FY 2019-20 to 30 November, 2020 from 31 July, 2020 there is a lot of time left for you to file your returns. However, there are some important facts that you should know while filing your tax returns to avoid any problems later.
Are you wondering that if you have worked in multiple companies in a financial year and none of them have deducted any tax from salary paid to you will you still have to pay your taxes? The answer to this is that it will depend on whether your total income from all the companies exceeds the exemption limit. If all these amounts are clubbed together and your income exceeds the basic exemption limit, you will have to pay income tax. In such cases, you will have to pay self-assessment tax and file the return of income.
Your salary income is the amount you receive from your employer in cash, kind or as a facility as per the rules. Your salary is governed under Section 17 of the Income-tax Act.
Also note that if your employer reimburses all your expenses on grocery and children’s education, it will be considered as your income. These are in the nature of perquisites and should be valued as per the rules prescribed in this behalf.
Perquisites are benefits received by a person as a result of his/her official position and are over and above the salary or wages. These perquisites can be taxable or non-taxable depending upon their nature.
Know that the allowances are fixed periodic amounts, apart from your salary, which are paid by an employer for the purpose of meeting some particular requirements of the employee. It can be in the form of tiffin allowance, transport allowance, uniform allowance, etc.
There are generally three types of allowances for the purpose of Income-tax Act – taxable allowances, fully exempted allowances and partially exempted allowances.