Income Tax Season: Do you want to file ITR without CA's help? Here's how you can do it using salary slip; learn procedure

Income Tax Season: The window for filing Income Tax Returns (ITR) for salaried individuals is open until July 31. And before the deadline, everybody needs to file their ITR for FY 2023-24. Many people have already filed their ITR while many are struggling to understand how much tax they have paid or if they are eligible for a refund. This confusion often stems from the various components of a salary, some of which are fully taxable, some partially exempt, and some not taxable at all. If you are also confused, look at your salary slip to identify which parts of your salary are taxed and which are not then here's something for you. Understanding this can help you with the entire calculation, possibly eliminating the need for a CA.

Tax on Salary: The Basics

Under the Income Tax Act, 1961, taxable benefits from payroll processing can be divided into two parts: recurring and ad hoc. These include allowances and perquisites, some of which are fully taxable, some partially taxable, and some not taxable at all.

Fully Taxable Salary Components

1. Basic Salary
   - This is the base salary without any deductions, bonuses, or benefits. It is fully taxable and cannot exceed 40% of your Cost to Company (CTC).

2. Medical Allowance
   - Fully taxable.

3. Conveyance Allowance
   - Taxable if it exceeds Rs 1600 per month, or Rs 3200 for disabled persons.

4. Dearness Allowance
   - Given to help employees cope with inflation, this is fully taxable.

5. Other Allowances
   - City Compensatory Allowance, Overtime Allowance, Meal Allowance, etc., are fully taxable.

Partially Taxable Salary Components

1. House Rent Allowance (HRA)
   - Tax exempt if you live in a rented house. If you live in your own house, it is fully taxable.

2. Leave Travel Allowance (LTA)
   - Exempt for travel expenses (not hotel or food) within India, twice in four years.

3. Children's Education and Hostel Allowance
   - Education allowance: Up to Rs 1200 per year per child (maximum two children).
   - Hostel allowance: Up to Rs 300 per month per child (maximum Rs 7200 annually for two children). Any excess is taxable.

Completely Tax-Free Salary Components

1. Medical Insurance Premium
   - Tax-free for insurance provided by the company for the employee and their family.

2. Phone and Internet Bills
   - Tax-free if the company reimburses these expenses with proper bills.

3. Food, Reading, and Gadgets
   - Tax-free for meal coupons, subscriptions for books, newspapers, and journals, and company-provided laptops, tablets, and computers.

How to Calculate Tax

1. Open an Online Income Tax Calculator
   - Select the financial year you want to calculate tax for.

2. Select Your Age
   - Choose the appropriate age category.

3. Enter Your Taxable Salary
   - Input your salary after deducting exemptions like HRA and LTA for the old tax regime, or without these exemptions for the new tax regime.

4. Include Other Income
   - Enter details like interest income, rental income, and home loan interest.

5. Income from Digital Assets
   - Enter net income (sale consideration less cost of acquisition), taxed at 30% plus surcharge and cess.

6. Input Tax-Saving Investments (Old Tax Regime)
   - Include investments under sections 80C, 80D, 80G, 80E, and 80TTA.

7. Calculate Your Tax Liability
   - Click 'Calculate' to get your tax liability.