E-Filing for Salaried Individuals
For a salaried employee, filing income tax return is very easy. They have to use ITR-1 which is the simplest. In ITR-1, you can include the rental income and interest income along with the salary income. Salaried individuals need to fill Form-16 to file their ITR’s, being provided by the employers. In the ITR’s you also tell the taxes paid. For salaried individual, the employer deducts tax before handing over the salary.
This is known as tax deduction at source (TDS). Similarly, Bank also deducts tax(TDS) if the interest of FD exceeds Rs 10,000. To cross check the ‘tax paid’ with the income tax department you can view form 26AS.
The form 26AS has all the details of TDS against your PAN. To calculate the correct tax liability, your employer asks proof of tax saving investment (deductions).
In the month of January and February you give proofs to avail income tax exemption and income tax deductions. According to your given proof, the employer determines your tax liability for the given financial year. The Bank interest income is considered as the “Other Income”. The interest upto Rs. 10,000 on the savings account is eligible for tax deduction under section 80TTA. You should add up all the interest of the year for tax consideration. For Bank FD, the banks may deduct tax at source.
You would get the form 16A for this deduction. Since, the assessment year 2015-16, you have to give details of all the active bank account in income tax return form during e-filing. The Income Tax Department has stopped giving refund cheques. Rather, it transfers the income tax refund through the Electronic Clearing Service (ECS).