In short
- Your employer deducts tax from your salary every month using the salaried slabs.
- If your taxable income is above Rs 600,000 a year, you still have to file a return and wealth statement.
- School fees, Zakat, approved donations, a pension fund or a home loan can lower your tax.
What counts as salary
- Basic pay, allowances, bonuses, overtime and commission.
- Benefits from your employer, such as a company car or house, valued under the Income Tax Rules.
- Money paid back to you for expenses you spent on official work is not your salary.
What you file each year
- An income tax return and a wealth statement on IRIS, normally by 30 September.
- Bank profit, rent or any other income must be shown too, not just salary.
- Tax already taken on electricity and phone bills, car registration and bank profit is adjusted in the return.
Changed jobs this year?
- Get a salary certificate from each employer.
- Tell your new employer what you earned and the tax deducted before you joined, so they deduct the right amount.
Example
Ali earns Rs 150,000 a month
His annual salary is Rs 1,800,000. Tax on the Tax Year 2027 slabs is Rs 6,000 plus 11% of the Rs 600,000 above Rs 1.2 million: Rs 72,000 a year, or Rs 6,000 a month. If he also pays school fees or Zakat, our tax saver shows what he could get back.
Common mistakes we fix
- Not showing bank profit or a small side income in the return.
- A wealth statement that doesn't reconcile with income and spending.
- Forgetting the tax already deducted on bills and vehicle tokens.
Do I need to file if my employer already deducts tax?
Yes, if your taxable income is above Rs 600,000 a year. Filing is also how you get on the Active Taxpayers' List and claim back extra tax deducted.
Can I claim travel, fuel or phone expenses against my salary?
No. The law doesn't allow employees to deduct expenses from salary. You can, however, claim the allowances and tax credits shown in our tax saver.
General guidance for Tax Year 2027, not advice on your specific case. Rules change with each Finance Act, so please speak to us before acting on it.