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Income Tax Return filing for Salaried Employees

Tax Calculation & Return Filing for a Salaried person (One Form 16)

Tax Calculation For Salaried Person
Miss Kavya is an employee of XYZ Pvt. Ltd. During the financial year 2023-2024 (assessment year 2024-2025), she received the following salary components from organizations,
      XYZ Private Limited.
o. Basic Salary: Rs. 6,00,000
o. House Rent Allowance (HRA): Rs. 2,40,000
o. Special Allowance: Rs. 3,00,000
o. Conveyance Allowance: Rs. 15,000
o. Medical Allowance: Rs. 15,000
o. Leave Travelling Allowance: Rs. 1,20,000
o. Communication Allowance: Rs. 24,000
o. Bonus: Rs. 1,00,000
o. Provident Fund Contribution: Rs. 1,20,000
      Investments
o. Kavya paid Rs. 30,000 as Health insurance premiums for self and her immediate family and Rs. 35,000 as health insurance premium for her parents.
o. Additionally, she received Rs 4,500 as Savings Bank interest and Rs 9,000 as Fixed Deposit interest.
    Let us do the analysis and tax calculation.
    Before starting the return filing, you need to do some prerequisite.
  1. Gather the Required Documents and Information
    • Form 16: This is the statement provided by your employers, summarizing your salary details, tax deductions, and TDS (Tax Deducted at Source) information.
    • Bank Statements: Download the Interest certificate from Bank for Financial Year e.g FY 2023-2024.
    • Download AIS and 26AS (Annual tax Statement)
  2. Choose the correct ITR form.
    3. ITR1 form is the best suited for your tax liability and return filing.
    For detailed information about the ITR forms selection criteria, please refer my blog ITR Forms
  3. Report Your Income
    4. You can use the simple page and paper or excel file. Refer the Form16 and summarize the salary details and Interest certificate. You can refer to the AIS and 26AS documents and validate the income shown in Form 16.
  4. Claim Deductions and Exemptions
    5. You can use the simple page and paper or excel file. Refer to Form16 and consolidate the salary deductions. You can refer to the AIS and 26AS documents and validate the income shown and validate the deduction shown in Form 16.
  5. Calculate Your Tax Liability for FY 2024-2025
    6. You can use the simple page and paper or excel file. Please refer to the following image for detailed summary and tax calculation.
    Tax Calculation for FY 2024-2025 for One Form 16

    Tax Calculation for FY2024-2025 Salaried with One Form 16


    Tax Computation FY 2024-2025
    • Savings bank interest amounting to Rs 10,000 are exempt. As Kavya received Rs 4500 as Savings Bank interest, so the whole amount is exempt.
    • As per Section 80D, Kavya is allowed only to claim exemption of Rs. 60,000.
      • For detailed information about the 80D exemption, please refer my blog 80D Exemptions
    Tips for Saving Income tax.
    • Increase investment in 80C section like PPF, LIC premium at least up to Rs 30,000.
    • She should buy a home to take advantage of Section 24 of the Income Tax Act which allows homeowners to claim a deduction of up to Rs. 2 lakhs
    • She should invest in NPS scheme to take exemption of Rs 50,000 under section 80CCD(1B)
      • All these exemptions are applicable for the Old Tax Regime.
    Tax Regime Selection
      We recommend Kavya should go with the New Tax regime as the tax liability will be less.
  6. Calculate Your Tax Liability for FY 2023-2024
    7. You can use the simple page and paper or excel file. Please refer to the following image for detailed summary and tax calculation.
    Salaried with 2 Form 16-23
    Tax Computation FY 2023-2024
    • Savings bank interest amounting to Rs 10,000 are exempt. As Kavya received Rs 4500 as Savings Bank interest, so the whole amount is exempt.
    • As per Section 80D, Kavya is allowed only to claim exemption of Rs. 60,000.
      • For detailed information about the 80D exemption, please refer my blog 80D Exemptions
    Tips for Saving Income tax.
    • Increase investment in 80C section like PPF, LIC premium at least up to Rs 30,000.
    • She should buy a home to take advantage of Section 24 of the Income Tax Act which allows homeowners to claim a deduction of up to Rs. 2 lakhs
    • She should invest in NPS scheme to take exemption of Rs 50,000 under section 80CCD(1B)
      • All these exemptions are applicable for the Old Tax Regime.
    Tax Regime Selection
      We recommend Kavya should go with the New Tax regime as the tax liability will be less.
  7. Calculate Your Tax Liability for FY 2022-2023.
    8. You can use the simple page and paper or excel file. Please refer to the following image for detailed summary and tax calculation.
    Salaried with 1 Form 16-23
    Tax Computation FY 2023-2024
    • Savings bank interest amounting to Rs 10,000 are exempt. As Kavya received Rs 4500 as Savings Bank interest, so the whole amount is exempt.
    • As per Section 80D, Kavya is allowed only to claim exemption of Rs. 60,000.
      • For detailed information about the 80D exemption, please refer my blog 80D Exemptions
    Tips for Saving Income tax.
    • Increase investment in 80C section like PPF, LIC premium at least up to Rs 30,000.
    • She should buy a home to take advantage of Section 24 of the Income Tax Act which allows homeowners to claim a deduction of up to Rs. 2 lakhs
    • She should invest in NPS scheme to take exemption of Rs 50,000 under section 80CCD(1B)
      • All these exemptions are applicable for the Old Tax Regime.
    Tax Regime Selection
      We recommend Kavya should go with the New Tax regime as the tax liability will be less.
  8. Validate and File your Return.
    9. If there are any compliance issues or errors in your form, the e-portal displays all the issues during validation process. The best thing is portal provides recommendations to rectify those errors as well. Once all those issues are rectified, you are ready to submit the form and complete the return filing process.
  9. Verify your Return.
    10. We recommend e-verify the return. It is a quick and easy way of verification. If e-verification is not possible, you need to go for Physical verification.
  10. Save Acknowledgment and Keep Records
    11. Once verification is successful, an Acknowledgement number will be generated. please download the Acknowledgement and keep it as records.
Please refer my blog Step by step guide for Return filing

Tax Calculation & Return Filing for a Salaried person (Two Form 16)

Miss Kavya is an employee of XYZ Pvt. Ltd and before joining XYZ Pvt Ltd she was working with ABC Public Limited. During the financial year 2023-2024 (assessment year 2024-2025), she received the following salary components from organizations,
      ABC Public Limited.
o. Basic Salary: Rs. 5,00,000
o. House Rent Allowance (HRA): Rs. 2,00,000
o. Special Allowance: Rs. 1,00,000
o. Conveyance Allowance: Rs. 8,000
o. Medical Allowance: Rs. 5,000
o. Provident Fund Contribution: Rs. 60,000

      XYZ Private Limited.
o. Basic Salary: Rs. 6,00,000
o. House Rent Allowance (HRA): Rs. 2,40,000
o. Special Allowance: Rs. 3,00,000
o. Conveyance Allowance: Rs. 15,000
o. Medical Allowance: Rs. 15,000
o. Leave Travelling Allowance: Rs. 1,20,000
o. Communication Allowance: Rs. 24,000
o. Bonus: Rs. 1,00,000
o. Provident Fund Contribution: Rs. 1,20,000
      Investments
o. Kavya paid Rs. 30,000 as Health insurance premiums for self and her immediate family and Rs. 35,000 as health insurance premium for her parents.
o. Additionally, she received Rs 4,500 as Savings Bank interest and Rs 9,000 as Fixed Deposit interest.
    Let us do the analysis and tax calculation
    Before starting the return filing, you need to do some prerequisite.
  1. Gather the Required Documents and Information
    • Two Form 16s: These are statements provided by your employers, summarizing your salary details, tax deductions, and TDS (Tax Deducted at Source) information for each employment.
    • Bank Statements: Download the Interest certificate from Bank for Financial Year e.g FY 2023-2024.
    • Download AIS and 26AS (Annual tax Statement)
  2. Choose the right ITR form.
    3. ITR1 form is the most suitable for your tax liability and return filing.
    For detailed information about the ITR forms selection criteria, please refer my blog ITR Forms
  3. Report Your Income
    4. You can use the simple page and paper or excel file. Refer to both the Form16 and summarize the salary details and Interest certificate. You can refer to the AIS and 26AS documents and validate the income shown in Form 16.
  4. Claim Deductions and Exemptions
    5. You can use the simple page and paper or excel file. Refer to both the Form16 and consolidate the salary deductions. You can refer to the AIS and 26AS documents and validate the income shown and validate the deduction shown in Form 16.
  5. Calculate Your Tax Liability for FY 2024-2025
    6. You can use the simple page and paper or excel file. Please refer to the following image for detailed summary and tax calculation.

    Tax Calculation for FY 2024-2025, Salaried with two Form 16
    Tax Computation FY 2024-2025
    • Savings bank interest amounting to Rs 10,000 are exempt. As Kavya received Rs 4500 as Savings Bank interest, so the whole amount is exempt.
    • PF amount is eligible for 80C, however max limit for 80C is Rs 1,50,000. So, Ramesh would get Rs.1,50,000 as 80C exemption even though his eligible investment for 80C is Rs 1,80,000.
    • As per Section 80D, Kavya is allowed only to claim exemption of Rs. 60,000.
      • For detailed information about the 80D exemption, please refer my blog 80D Exemptions
    Tips for Saving Income tax.
    • She should buy a home to take advantage of Section 24 of the Income Tax Act which allows homeowners to claim a deduction of up to Rs. 2 lakhs
    • She should invest in NPS scheme to take exemption of Rs 50,000 under section 80CCD(1B)
      • All these exemptions are applicable for the Old Tax Regime.
    Tax Regime Selection
      We recommend Kavya should go with the New Tax regime as the tax liability will be less.
  6. Calculate Your Tax Liability for FY 2023-2024
    7. You can use the simple page and paper or excel file. Please refer to the following image for detailed summary and tax calculation.
    Salaried with 2 Form 16-24
    Tax Computation FY 2023-20245
    • Savings bank interest amounting to Rs 10,000 are exempt. As Kavya received Rs 4500 as Savings Bank interest, so the whole amount is exempt.
    • PF amount is eligible for 80C, however max limit for 80C is Rs 1,50,000. So, Ramesh would get Rs.1,50,000 as 80C exemption even though his eligible investment for 80C is Rs 1,80,000.
    • As per Section 80D, Kavya is allowed only to claim exemption of Rs. 60,000.
      • For detailed information about the 80D exemption, please refer my blog 80D Exemptions
    Tips for Saving Income tax.
    • She should buy a home to take advantage of Section 24 of the Income Tax Act which allows homeowners to claim a deduction of up to Rs. 2 lakhs
    • She should invest in NPS scheme to take exemption of Rs 50,000 under section 80CCD(1B)
      • All these exemptions are applicable for the Old Tax Regime.
    Tax Regime Selection
      We recommend Kavya should go with the New Tax regime as the tax liability will be less.
  7. Calculate Your Tax Liability for FY 2022-2023
    8. You can use the simple page and paper or excel file. Please refer to the following image for detailed summary and tax calculation.
    Salaried with 2 Form 16-23
    Tax Computation FY 2022-2023
    • Savings bank interest amounting to Rs 10,000 are exempt. As Kavya received Rs 4500 as Savings Bank interest, so the whole amount is exempt.
    • As per Section 80D, Kavya is allowed only to claim exemption of Rs. 60,000.
      • For detailed information about the 80D exemption, please refer my blog 80D Exemptions
    Tips for Saving Income tax.
    • Increase investment in 80C section like PPF, LIC premium at least up to Rs 30,000.
    • She should buy a home to take advantage of Section 24 of the Income Tax Act which allows homeowners to claim a deduction of up to Rs. 2 lakhs
    • She should invest in NPS scheme to take exemption of Rs 50,000 under section 80CCD(1B)
      • All these exemptions are applicable for the Old Tax Regime.
    Tax Regime Selection
      We recommend Kavya should go with the New Tax regime as the tax liability will be less.
  8. Validate and File your Return.
    9. If there are any compliance issues or errors in your form, the e-portal displays all the issues during validation process. The best thing is portal provides recommendations to rectify those errors as well. Once all those issues are rectified, you are ready to submit the form and complete the return filing process.
  9. Verify your Return.
    10. We recommend e-verify the return. It is a quick and easy way of verification. If e-verification is not possible, you need to go for Physical verification.
  10. Save Acknowledgment and Keep Records.
    11. Once verification is successful, an Acknowledgement number will be generated. please download the Acknowledgement and keep it as records.
Please refer my blog Step by step guide for Return filing

Tax Calculation for a Salaried person with a self-occupied House

Mr. Ramesh is an employee of XYZ Pvt. Ltd. During the financial year 2023-2024 (assessment year 2024-2025), he received the following salary components from organizations,
      XYZ Private Limited.
o. Basic Salary: Rs. 6,00,000
o. House Rent Allowance (HRA): Rs. 2,40,000
o. Special Allowance: Rs. 3,00,000
o. Conveyance Allowance: Rs. 15,000
o. Medical Allowance: Rs. 15,000
o. Leave Travelling Allowance: Rs. 1,20,000
o. Communication Allowance: Rs. 24,000
o. Bonus: Rs. 1,00,000
o. Provident Fund Contribution: Rs. 1,20,000
      Investments
o. Ramesh paid Rs. 30,000 as Health insurance premiums for self and his immediate family and Rs. 35,000 as health insurance premium for his parents.
o. Additionally, he received Rs 4,500 as Savings Bank interest and Rs 9,000 as Fixed Deposit interest.
o. Ramesh owns a house property which is self-occupied and for FY. 2023-2024, he paid Rs 90,200 as Home loan principal and Rs 1,91,000 as Home loan interest.
    Let us do the analysis and tax calculation
    Before starting the return filing, you need to do some prerequisite.
  1. Gather the Required Documents and Information
    • Form 16: This is the statement provided by your employers, summarizing your salary details, tax deductions, HRA and TDS (Tax Deducted at Source) information.
    • Home Loan Interest Certificate: Download the Home loan Interest certificate from Bank for FY 2022-2023.
    • Bank Statements: Download the Interest certificate from Bank for last Financial Year e.g FY 2022-2023.
    • Download AIS and 26AS (Annual tax Statement)
  2. Choose the correct ITR form.
    3. ITR1 form is the most suitable for your tax liability and return filing.
    For detailed information about the ITR forms selection criteria, please refer my blog ITR Forms
  3. Report Your Income
    4. You can use the simple page and paper or excel file. Refer the Form16 and summarize the salary details and Interest certificate. You can refer to the AIS and 26AS documents and validate the income shown in Form 16.
  4. Claim Deductions and Exemptions
    5. You can use the simple page and paper or excel file. Refer the Form16 and consolidate the salary deductions. You can refer to the AIS and 26AS documents and validate the income shown and validate the deduction shown in Form 16.
  5. Calculate Your Tax Liability for FY 2024-2025
    6. You can use the simple page and paper or excel file. Please refer to the following image for detailed summary and tax calculation.

    Tax calculation for FY 2024-2025, Salaried with One House property
    Tax calculation for FY 2024-2025, Salaried with One House property 
    Tax Computation FY 2024-2025
    • Savings bank interest amounting to Rs 10,000 are exempt. As Ramesh received Rs 4500 as Savings Bank interest, so the whole amount is exempt.
    • Home loan principal component is liable to be considered in 80C, however max limit for 80C is Rs 1,50,000. so, Ramesh would get Rs.1,50,000 as 80C exemption even though his eligible investment for 80C is Rs 2,10,200
    • Home loan interest component is liable for exemption under Section 24 with max limit for self-occupied home is Rs 2,00,000. So entire amount paid by Ramesh, Rs 1,91,000 is considered as exemption (loss)
    • As per Section 80D, Ramesh is allowed only to claim exemption of Rs. 60,000.
      • For detailed information about the 80D exemption, please refer my blog 80D Exemptions
    Tips for Saving Income tax.
    • He should invest in NPS scheme to take exemption of Rs 50,000 under section 80CCD(1B)
    • All these exemptions are applicable for the Old Tax Regime.
    Tax Regime Selection
      We recommend Kavya should go with the New Tax regime as the tax liability will be less.
  6. Calculate Your Tax Liability for FY 2023-2024
    7. You can use the simple page and paper or excel file. Please refer to the following image for detailed summary and tax calculation.
    Salaried with one House Property
    Tax Computation FY 2023-2024
    • Savings bank interest amounting to Rs 10,000 are exempt. As Ramesh received Rs 4500 as Savings Bank interest, so the whole amount is exempt.
    • Home loan principal component is liable to be considered in 80C, however max limit for 80C is Rs 1,50,000. so, Ramesh would get Rs.1,50,000 as 80C exemption even though his eligible investment for 80C is Rs 2,10,200
    • Home loan interest component is liable for exemption under Section 24 with max limit for self-occupied home is Rs 2,00,000. So entire amount paid by Ramesh, Rs 1,91,000 is considered as exemption (loss)
    • As per Section 80D, Ramesh is allowed only to claim exemption of Rs. 60,000.
      • For detailed information about the 80D exemption, please refer my blog 80D Exemptions
    Tips for Saving Income tax.
    • He should invest in NPS scheme to take exemption of Rs 50,000 under section 80CCD(1B)
      • All these exemptions are applicable for the Old Tax Regime.
    Tax Regime Selection
      We recommend Kavya should go with the Old Tax regime as the tax liability will be less.
  7. Calculate Your Tax Liability for FY 2022-2023.
    8. You can use the simple page and paper or excel file. Please refer to the following image for detailed summary and tax calculation.
    Salaried with one House Property
    Tax Computation FY 2022-2023
    • Savings bank interest amounting to Rs 10,000 are exempt. As Ramesh received Rs 4500 as Savings Bank interest, so the whole amount is exempt.
    • Home loan principal component is liable to be considered in 80C, however max limit for 80C is Rs 1,50,000. so, Ramesh would get Rs.1,50,000 as 80C exemption even though his eligible investment for 80C is Rs 2,10,200
    • Home loan interest component is liable for exemption under Section 24 with max limit for self-occupied home is Rs 2,00,000. So entire amount paid by Ramesh, Rs 1,91,000 is considered as exemption (loss)
    • As per Section 80D, Ramesh is allowed only to claim exemption of Rs. 60,000.
      For detailed information about the 80D exemption, please refer my blog 80D Exemptions
    Tips for Saving Income tax.
    • He should invest in NPS scheme to take exemption of Rs 50,000 under section 80CCD(1B)
      • All these exemptions are applicable for the Old Tax Regime.
    Tax Regime Selection
      We recommend Ramesh should go with the Old Tax regime as the tax liability will be less.
  8. Validate and File your Return.
    9. If there are any compliance issues or errors in your form, the e-portal displays all the issues during validation process. The best thing is portal provides recommendations to rectify those errors as well. Once all those issues are rectified, you are ready to submit the form and complete the return filing process.
  9. Verify your Return.
    10. We recommend e-verify the return. It is a quick and easy way of verification. If e-verification is not possible, you need to go for Physical verification.
  10. Save Acknowledgment and Keep Records
    11. Once verification is successful, an Acknowledgement number will be generated. please download the Acknowledgement and keep it as records. Please refer my blog Step by step guide for Return filing

Tax Calculation for a Salaried person with two self-occupied Houses

Mr. Ramesh is an employee of XYZ Pvt. Ltd. During the financial year 2023-2024 (assessment year 2024-2025), he received the following salary components from organizations,
      XYZ Private Limited.
o. Basic Salary: Rs. 6,00,000
o. House Rent Allowance (HRA): Rs. 2,40,000
o. Special Allowance: Rs. 3,00,000
o. Conveyance Allowance: Rs. 15,000
o. Medical Allowance: Rs. 15,000
o. Leave Travelling Allowance: Rs. 1,20,000
o. Communication Allowance: Rs. 24,000
o. Bonus: Rs. 1,00,000
o. Provident Fund Contribution: Rs. 1,20,000
      Investments
o. Ramesh paid Rs. 30,000 as Health insurance premiums for self and his immediate family and Rs. 35,000 as health insurance premium for his parents.
o. Additionally, he received Rs 4,500 as Savings Bank interest and Rs 9,000 as Fixed Deposit interest.
o. Ramesh owns a house property which is self-occupied and for FY. 2023-2024, he paid Rs 90,200 as Home loan principal and Rs 1,91,000 as Home loan interest.
o. Similarly, Ramesh owns another house property which is also self-occupied and for FY. 2022-2023, he paid Rs 1,15,000 as Home loan principal and Rs 2,14,400 as Home loan interest.
    Let us do the analysis and tax calculation
    Before starting the return filing, you need to do some prerequisite.
  1. Gather the Required Documents and Information
    • Form 16: This is the statement provided by your employers, summarizing your salary details, tax deductions, HRA and TDS (Tax Deducted at Source) information.
    • Home loan Interest Certificates: Download the Home Loan Interest certificate from Bank for last Financial year e.g FY 2023-2024.
    • Bank Statements: Download the Interest certificate from Bank for last Financial year e.g FY 2023-2024.
    • Download AIS and 26AS (Annual tax Statement)
  2. Choose the correct ITR form.
    3. ITR4 form is best suited for your tax liability and return filing.
    For detailed information about the ITR forms selection criteria, please refer my blog ITR Forms
  3. Report Your Income
    4. You can use the simple page and paper or excel file. Refer the Form16 and summarize the salary details and Interest certificate. You can refer to the AIS and 26AS documents and validate the income shown in Form 16.
  4. Claim Deductions and Exemptions
    5. You can use the simple page and paper or excel file. Refer the Form16 and consolidate the salary deductions. You can refer to the AIS and 26AS documents and validate the income shown and validate the deduction shown in Form 16.
  5. Calculate Your Tax Liability for FY 2024-2025
    6. You can use the simple page and paper or excel file. Please refer to the following image for detailed summary and tax calculation.

    Tax calculation for Fy 2024-2025 Salaried with Two House Properties
    Tax calculation for FY 2024-2025 Salaried with Two House Properties


    Tax Computation FY 2024-2025
    • Savings bank interest amounting to Rs 10,000 are exempt. As Ramesh received Rs 4500 as Savings Bank interest, so the whole amount is exempt.
    • Home loan principal component is liable to be considered in 80C, however max limit for 80C is Rs 1,50,000. so, Ramesh would get Rs.1,50,000 as 80C exemption even though his eligible investment for 80C is Rs 3,25,200
    • Under section 24, a person can have two properties as self-occupied. However, the maximum exemption of Home loan interest is Rs 2,00,000/- for self-occupied properties. so, Ramesh would get Rs.2,00,000 as exemption under Section 24 even though he has paid interest amount Rs 4,05,400
    • As per Section 80D, Ramesh is allowed only to claim exemption of Rs. 60,000.
      For detailed information about the 80D exemption, please refer my blog 80D Exemptions
    Tips for Saving Income tax.
    • He should invest in NPS scheme to take exemption of Rs 50,000 under section 80CCD(1B)
      • All these exemptions are applicable for the Old Tax Regime.
    Tax Regime Selection
    We recommend Ramesh should go with the New Tax regime as the tax liability will be less.
  6. Calculate Your Tax Liability for FY 2023-2024
    7. You can use the simple page and paper or excel file. Please refer to the following image for detailed summary and tax calculation.
    Salaried with 2 Self occupied properties
    Tax Computation FY 2023-2024
    • Savings bank interest amounting to Rs 10,000 are exempt. As Ramesh received Rs 4500 as Savings Bank interest, so the whole amount is exempt.
    • Home loan principal component is liable to be considered in 80C, however max limit for 80C is Rs 1,50,000. so, Ramesh would get Rs.1,50,000 as 80C exemption even though his eligible investment for 80C is Rs 3,25,200
    • Under section 24, a person can have two properties as self-occupied. However, the maximum exemption of Home loan interest is Rs 2,00,000/- for self-occupied properties. so, Ramesh would get Rs.2,00,000 as exemption under Section 24 even though he has paid interest amount Rs 4,05,400
    • As per Section 80D, Ramesh is allowed only to claim exemption of Rs. 60,000.
      For detailed information about the 80D exemption, please refer my blog 80D Exemptions
    Tips for Saving Income tax.
    • He should invest in NPS scheme to take exemption of Rs 50,000 under section 80CCD(1B)
      • All these exemptions are applicable for the Old Tax Regime.
  7. Calculate Your Tax Liability for FY 2022-2023.
    8. You can use the simple page and paper or excel file. Please refer to the following image for detailed summary and tax calculation.
    Salaried with 2 self occupied House properties
    Tax Computation FY 2022-2023
    • Savings bank interest amounting to Rs 10,000 are exempt. As Ramesh received Rs 4500 as Savings Bank interest, so the whole amount is exempt.
    • Home loan principal component is liable to be considered in 80C, however max limit for 80C is Rs 1,50,000. so, Ramesh would get Rs.1,50,000 as 80C exemption even though his eligible investment for 80C is Rs 3,25,200
    • Under section 24, a person can have two properties as self-occupied. However, the maximum exemption of Home loan interest is Rs 2,00,000/- for self-occupied properties. so, Ramesh would get Rs.2,00,000 as exemption under Section 24 even though he has paid interest amount Rs 4,05,400
    • As per Section 80D, Ramesh is allowed only to claim exemption of Rs. 60,000.
      For detailed information about the 80D exemption, please refer my blog 80D Exemptions
    Tips for Saving Income tax.
    • He should invest in NPS scheme to take exemption of Rs 50,000 under section 80CCD(1B)
      • All these exemptions are applicable for the Old Tax Regime.
  8. Tax Regime Selection
    9. We recommend Ramesh should go with the Old Tax regime as the tax liability will be less.
  9. Validate and File your Return.
    10. If there are any compliance issues or errors in your form, the e-portal displays all the issues during validation process. The best thing is portal provides recommendations to rectify those errors as well. Once all those issues are rectified, you are ready to submit the form and complete the return filing process.
  10. Verify your Return.
    11. We recommend e-verify the return. It is a quick and easy way of verification. If e-verification is not possible, you need to go for Physical verification.
  11. Save Acknowledgment and Keep Records
    12. Once verification is successful, an Acknowledgement number will be generated. please download the Acknowledgement and keep it as records.
Please refer my blog Step by step guide for Return filing

Tax Calculation for a Salaried person with one self-occupied House and one Rented house

Mr. Ramesh is an employee of XYZ Pvt. Ltd. During the financial year 2023-2024 (assessment year 2024-2025), he received the following salary components from organizations,
      XYZ Private Limited.
o. Basic Salary: Rs. 6,00,000
o. House Rent Allowance (HRA): Rs. 2,40,000
o. Special Allowance: Rs. 3,00,000
o. Conveyance Allowance: Rs. 15,000
o. Medical Allowance: Rs. 15,000
o. Leave Travelling Allowance: Rs. 1,20,000
o. Communication Allowance: Rs. 24,000
o. Bonus: Rs. 1,00,000
o. Provident Fund Contribution: Rs. 1,20,000
      Investments
o. Ramesh paid Rs. 30,000 as Health insurance premiums for self and his immediate family and Rs. 35,000 as health insurance premium for his parents.
o. Additionally, he received Rs 4,500 as Savings Bank interest and Rs 9,000 as Fixed Deposit interest.
o. Ramesh owns a house property which is self-occupied and for FY. 2023-2024, he paid Rs 90,200 as Home loan principal and Rs 1,91,000 as Home loan interest.
o. Similarly, Ramesh owns another house property which is rented out and for FY. 2023-2024, he has paid Rs 1,15,000 as Home loan principal and Rs 2,14,400 as Home loan interest. he received rent of Rs. 12,000. Paid Rs 4,000 as Municipal tax for the property.
    Let us do the analysis and tax calculation
    Before starting the return filing, you need to do some prerequisite.
  1. Gather the Required Documents and Information
    • Form 16: This is the statement provided by your employers, summarizing your salary details, tax deductions, HRA and TDS (Tax Deducted at Source) information.
    • Home Loan Interest certificates,: Download the Home Loan Interest certificate from Bank for FY 2023-2024.
    • Bank Statements: Download the Interest certificate from Bank for FY 2023-2024.
    • Download AIS and 26AS (Annual tax Statement)
  2. Choose the correct ITR form.
    3. ITR4 form is best suited for your tax liability and return filing.
    For detailed information about the ITR forms selection criteria, please refer my blog ITR Forms
  3. Report Your Income
    4. You can use the simple page and paper or excel file. Refer the Form16 and summarize the salary details and Interest certificate. You can refer to the AIS and 26AS documents and validate the income shown in Form 16.
  4. Claim Deductions and Exemptions
    5. You can use the simple page and paper or excel file. Refer the Form16 and consolidate the salary deductions. You can refer to the AIS and 26AS documents and validate the income shown and validate the deduction shown in Form 16.
  5. Calculate Your Tax Liability for FY 2024-2025
    6. You can use the simple page and paper or excel file. Please refer to the following image for detailed summary and tax calculation.

    Tax calculation for Fy 2024-2025 Salaried with Two House Properties, One Rented
    Tax calculation for Fy 2024-2025 Salaried with Two House Properties with one Rented 


    Tax Computation FY 2024-2025
    • Savings bank interest amounting to Rs 10,000 are exempt. As Ramesh received Rs 4500 as Savings Bank interest, so the whole amount is exempt.
    • Home loan principal component is liable to be considered in 80C, however max limit for 80C is Rs 1,50,000. So, Ramesh would get Rs.1,50,000 as 80C exemption even though his eligible investment for 80C is Rs 3,25,200
    • For let out house, Net Annual value needs to be calculated using following formula NAV = (Rent Received - Municipal Taxes Paid) - 30% of (Home Loan Interest)
      This value is considered as income from rented out property.
    • Under section 24, for an individual, maximum exemption of Home loan interest is Rs 2,00,000/- for self-occupied and rented property So, Ramesh would get Rs.2,00,000 as exemption under Section 24 even though he has loss of Rs 3,23,800 from House property.
    • As per Section 80D, Ramesh is allowed only to claim exemption of Rs. 60,000.
      For detailed information about the 80D exemption, please refer my blog 80D Exemptions
    Tips for Saving Income tax.
    • He should invest in NPS scheme to take exemption of Rs 50,000 under section 80CCD(1B)
      • All these exemptions are applicable for the Old Tax Regime.
    Tax Regime Selection
    We recommend Ramesh should go with the New Tax regime as the tax liability will be less.
  6. Calculate Your Tax Liability for FY 2023-2024
    7. You can use the simple page and paper or excel file. Please refer to the following image for detailed summary and tax calculation.
    Salaried with 1 Self-occupied and 1 Rented
    Tax Computation FY 2023-2024
    o. Savings bank interest amounting to Rs 10,000 are exempt. As Ramesh received Rs 4500 as Savings Bank interest, so the whole amount is exempt.
    o. Home loan principal component is liable to be considered in 80C, however max limit for 80C is Rs 1,50,000. So, Ramesh would get Rs.1,50,000 as 80C exemption even though his eligible investment for 80C is Rs 3,25,200
    o. For let out house, Net Annual value needs to be calculated using following formula NAV = (Rent Received - Municipal Taxes Paid) - 30% of (Home Loan Interest)
    This value is considered as income from rented out property.
    o. Under section 24, for an individual, maximum exemption of Home loan interest is Rs 2,00,000/- for self-occupied and rented property So, Ramesh would get Rs.2,00,000 as exemption under Section 24 even though he has loss of Rs 3,23,800 from House property.
    o. As per Section 80D, Ramesh is allowed only to claim exemption of Rs. 60,000.
    For detailed information about the 80D exemption, please refer my blog 80D Exemptions
    Tips for Saving Income tax.
    • He should invest in NPS scheme to take exemption of Rs 50,000 under section 80CCD(1B)
      • All these exemptions are applicable for the Old Tax Regime.
    Tax Regime Selection
    We recommend Ramesh should go with the New Tax regime as the tax liability will be less.
  7. Calculate Your Tax Liability for FY 2022-2023.
    8. You can use the simple page and paper or excel file. Please refer to the following image for detailed summary and tax calculation.
    Salaried with 1 rented and 1 Self occupied property
    Tax Computation FY 2022-2023
    o. Savings bank interest amounting to Rs 10,000 are exempt. As Ramesh received Rs 4500 as Savings Bank interest, so the whole amount is exempt.
    o. Home loan principal component is liable to be considered in 80C, however max limit for 80C is Rs 1,50,000. So, Ramesh would get Rs.1,50,000 as 80C exemption even though his eligible investment for 80C is Rs 3,25,200
    o. For let out house, Net Annual value needs to be calculated using following formula NAV = (Rent Received - Municipal Taxes Paid) - 30% of (Home Loan Interest)
    This value is considered as income from rented out property.
    o. Under section 24, for an individual, maximum exemption of Home loan interest is Rs 2,00,000/- for self-occupied and rented property So, Ramesh would get Rs.2,00,000 as exemption under Section 24 even though he has loss of Rs 3,23,800 from House property.
    o. As per Section 80D, Ramesh is allowed only to claim exemption of Rs. 60,000.
    For detailed information about the 80D exemption, please refer my blog 80D Exemptions
    Tips for Saving Income tax.
    • He should invest in NPS scheme to take exemption of Rs 50,000 under section 80CCD(1B)
      • All these exemptions are applicable for the Old Tax Regime.
    Tax Regime Selection
    We recommend Ramesh should go with the Old Tax regime as the tax liability will be less.
  8. Validate and File your Return.
    9. If there are any compliance issues or errors in your form, the e-portal displays all the issues during validation process. The best thing is portal provides recommendations to rectify those errors as well. Once all those issues are rectified, you are ready to submit the form and complete the return filing process.
  9. Verify your Return.
    10. We recommend e-verify the return. It is a quick and easy way of verification. If e-verification is not possible, you need to go for Physical verification.
  10. Save Acknowledgment and Keep Records
    11. Once verification is successful, an Acknowledgement number will be generated. please download the Acknowledgement and keep it as records.
Please refer my blog Step by step guide for Return filing


References


Legal Disclaimer: The information provided is based on the current laws for FY 2024-25, FY 2023-24 and FY 2022-23 and readers should verify details with relevant authorities. Keep in mind that the process and options might vary slightly based on updates to the Income Tax e-Filing portal or changes in procedures, so it is a good idea to refer to the latest guidance available on the portal.


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