ITR filing for Railway employees
Learn everything about ITR filing for Railway employees such as taxability, tax rate, choosing ITR form, tax rates, due date, penalty, how to file ITR. Contact us for filing!!
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Filing an Income Tax Return (ITR) is a critical responsibility for all salaried individuals, including railway employees. This annual process involves declaring income earned during the financial year and paying the applicable taxes to the government. In this guide you will learn about taxability, tax rates, how to choose ITR form, how to file ITR, Due date and penalties for not filing ITR.
What is an ITR?
An Income Tax Return (ITR) is a form that individuals and entities use to report their income, expenses, deductions, and taxes paid to the government. It is a crucial document for ensuring that taxpayers fulfill their legal duty to report their financial activities for a financial year from April 1st to March 31st.
Taxability of Railway employees
Railway employees in India, like other salaried individuals, are subject to income tax based on their total earnings and applicable deductions. Here’s an overview of the taxability aspects specific to railway employees:
Components of Income for Railway Employees
- Basic Salary: The core component of the salary which is fully taxable.
- Dearness Allowance (DA): Fully taxable and is a significant part of the salary structure, especially for government employees.
- House Rent Allowance (HRA): Partially taxable, with exemptions available under Section 10(13A) if the employee lives in rented accommodation.
- Transport Allowance: Partially taxable with certain exemptions. For differently-abled employees, higher exemption limits apply.
- Special Allowances: Any other special allowances that are part of the salary structure can be either fully taxable or partially exempt based on specific provisions.
- Perquisites: Benefits like government quarters or concessional rent accommodations provided by the railway department may be taxable as perquisites.
- Other Benefits: Benefits like Leave Travel Concession (LTC) can be exempt under certain conditions.
What are the Deductions Available?
- Standard Deduction: A flat deduction of ₹50,000 is available to all salaried individuals.
- Section 80C: Deductions up to ₹1,50,000 for investments in instruments like Public Provident Fund (PPF), Employee Provident Fund (EPF), National Savings Certificates (NSC), life insurance premiums, etc.
- Section 80D: Deductions for health insurance premiums, up to ₹25,000 for self and family, and an additional ₹25,000 for parents (₹50,000 if parents are senior citizens).
- Section 80E: Interest paid on education loans can be claimed as a deduction.
- Section 80TTA: Deduction up to ₹10,000 on interest earned from savings accounts.
- Section 24(b): Interest paid on home loans up to ₹2,00,000 is deductible under this section.
Is ITR filing for railway employees mandatory?
No, ITR filing is not required if your income from all sources including salary income is below the basic exemption limit of Rs. 2,50,000 under Old regime or Rs. 3,00,000 under new regime.
But even though it is not compulsory, it is highly recommended as it helps in building financial history, serves as income proof for applying for loan, credit card, Visa.
Which ITR form is applicable for railway employees?
ITR-1: This form is for individuals with income from salary/pension, one house property, other sources (like interest income and total income up to ₹50 lakh. Individuals with business or professional income and capital gains cannot use this form.
ITR-2: This form is for individuals who do not have income from business or profession. It covers income from salary/pension, house property, capital gains, and other sources.
Hence Railway employees can use either ITR-1 or ITR-2 depending on income sources other than salary.
Income tax rates for railway employees
Old tax Regime
| Income | Tax rates |
| Upto ₹ 2.50 lakh | 0% |
| ₹ 2.50 lakh – ₹ 5 lakh | 5% |
| ₹ 5 lakh – ₹ 10 lakh | 20% |
| Above ₹ 10 lakh | 30% |
You Can claim deduction under Section 80C, 80D, 80G, etc
For senior citizen (age between 60 & 80 years), tax rate is 0% upto ₹ 3 lakhs. Rest of the rates are same.
For super senior citizen (age above 80 years), tax rate is 0% upto ₹ 5 lakhs. Rest of the rates are same.
In Old tax regime, a maximum tax rebate under section 87A of Rs. 12,500 is available for income upto Rs. 5 lakhs meaning your income is totally tax free till Rs. 5 lakhs. The rebate under section 87A is not allowed to a Non-resident.
New tax Regime (FY 23-24)
| Income | Tax rates |
| Upto ₹ 3 lakh | 0% |
| ₹ 3 lakh – ₹ 6 lakh | 5% |
| ₹ 6 lakh – ₹ 9 lakh | 10% |
| ₹ 9 lakh – ₹ 12 lakh | 15% |
| ₹ 12 lakh – ₹ 15 lakh | 20% |
| More than ₹ 15 lakh | 30% |
New tax Regime (FY 24-25)
Income | Tax Rate |
Upto ₹ 3 lakh | 0% |
₹ 3 lakh – ₹ 7 lakh | 5% |
₹ 7 lakh – ₹ 10 lakh | 10% |
₹ 10 lakh – ₹ 12 lakh | 15% |
₹ 12 lakh – ₹ 15 lakh | 20% |
Above ₹ 15 lakh | 30% |
New tax Regime (FY 25-26)
| Income Range (₹) | Tax Rate |
|---|---|
| Upto ₹ 4 lakh | Nil |
| ₹ 4 lakh – ₹ 8 lakh | 5% |
| ₹ 8 lakh – ₹ 12 lakh | 10% |
| ₹ 12 lakh – ₹ 16 lakh | 15% |
| ₹ 20 lakh – ₹ 20 lakh | 20% |
| ₹ 20 lakh – ₹ 24 lakh | 25% |
| Above ₹ 24 lakh | 30% |
Difference between Form 26AS and AIS
Form 26AS and the Annual Information Statement (AIS) are essential documents for taxpayers in India, each serving distinct purposes. Form 26AS acts as a tax passbook, summarizing taxes deducted, collected, and paid by the taxpayer during a financial year. It includes details on Tax Deducted at Source (TDS), Tax Collected at Source (TCS), advance tax payments, self-assessment tax payments, and any tax refunds received. The data in Form 26AS is sourced from employers, banks, and other entities that deduct or collect tax and from the taxpayer’s own payments.
In contrast, the AIS provides a comprehensive view of a taxpayer’s financial transactions, encompassing a broader range of information. It includes detailed records of interest and dividend income, shares and mutual funds transactions, property transactions, and significant gifts, among other financial activities. This information is sourced from banks, financial institutions, and other entities that report transactions to the Income Tax Department. Both Form 26AS and AIS is accessible on the Income Tax Department’s e-filing portal.
Step-by-Step Guide for ITR filing for Railway employees
1. Registering on the Income Tax E-Filing Portal
- Visit the Portal: Go to the official Income Tax Department e-filing website
- New User Registration: If you are a first-time user, click on ‘Register Yourself’. Choose the ‘Individual’ category and enter your PAN, which will serve as your User ID.
- Fill in Details: Provide your basic details, contact information, and create a password.
2. Choosing the Correct ITR Form (ITR-1 or ITR-2)
3. Filling Out Personal Details and Income Information
- Select the Assessment Year: Choose the appropriate assessment year for which you are filing the return.
- Income Details: Enter your income details under the appropriate heads:
4. Claiming Deductions and Exemptions
- Deductions under Section 80C: Enter eligible deductions such as life insurance premiums, PPF, NSC, and tuition fees.
- Deductions under Section 80D: Include premiums paid for health insurance.
- Other Deductions: Claim deductions under other sections like 80E for education loan interest, 80G for donations, etc.
5. Verifying and Submitting the Return
- Calculate Tax: Click on ‘Compute Tax’ to see the tax liability or refund.
- Tax Payment: If there is any tax payable, pay it through the e-filing portal using net banking or other available options.
- Preview and Submit: Preview the completed ITR form, ensure all details are correct, and click ‘Submit’.
- Verification: After submission, verify your ITR within 30 days of filing. You can e-verify using methods such as Aadhaar OTP, net banking, or through a digital signature. Alternatively, you can send a physical signed copy of ITR-V to the Centralized Processing Center (CPC).
What is the Due date of ITR filing for Railway employees?
The Due date to file Income tax return for railway employees is 31st July.
In case you have missed this deadline then you can file belated ITR till 31st December with late fees.
Also for any mistake made while filing ITR before 31st July, you can make corrections by filing Revised ITR any number of times till 31st December.
If you miss deadline of Belated income tax return filing then you can file Updated ITR till 2 years from the end of relevant assessment year with late fees and additional taxes.
What are the Consequences of non-payment of Tax and non-filing of ITR by Railway employees?
Failing to pay taxes and file your Income Tax Return (ITR) has severe consequences. Firstly, unreported income is deemed illegal, equating to tax evasion, and can result in a penalty of 100% to 300% of the evaded tax under Section 271(C). Secondly, a penalty ranging from 10% to 90% of the undisclosed amount may be imposed under Section 271AAB, depending on the circumstances. Lastly, if you miss the filing deadline, a 1% interest per month or part thereof will be charged on the unpaid tax amount as per Section 234A.
Conclusion
Understanding the taxability for railwa employees involves recognizing the various income components, applicable deductions, and tax rates. By staying informed about these aspects, railway employees can file their Income tax return correctly by choosing the right ITR form. Regularly updating knowledge about income tax and seeking professional advice when needed can further aid in effective tax planning.
In case you still have any query or want to file ITR with CA assisstance then you can contact us at +91 9769647582
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