Retirement benefit
This query is : Resolved
05 August 2017
Retirement benefits in ITR 1???
05 August 2017
Calculate all the retirement benefits , combine and show under salaries in itr 1
21 July 2025
Yes, retirement benefits can be shown in ITR-1 (Sahaj) under certain conditions.
✅ When can Retirement Benefits be shown in ITR-1?
ITR-1 can be used if:
You are a salaried individual or pensioner (excluding business/professional income).
Total income is up to ₹50 lakh.
You do not have capital gains, house property more than one, or foreign assets.
Retirement benefits like gratuity, commuted pension, leave encashment, and PF withdrawal are fully or partially exempt under Sections 10(10), 10(10A), 10(10AA), or 10(11)/(12).
📌 Where to Report Retirement Benefits in ITR-1?
Pension (Uncommuted)
Treated as salary income → Show under "Salary/Pension" in the “Income Details” section.
Gratuity / Leave Encashment / Commuted Pension / PF
These are exempt incomes, so:
Enter taxable portion (if any) in "Salary"
Enter exempt portion under “Exempt Income” > “Others” (Schedule EI)
Example for "Others":
bash
Copy
Edit
Gratuity received on retirement - Exempt u/s 10(10)
Commuted Pension - Exempt u/s 10(10A)
Leave encashment - Exempt u/s 10(10AA)
PF withdrawal - Exempt u/s 10(12)
⚠️ When NOT to Use ITR-1 for Retirement Benefits?
If you received retirement benefits in arrears → Use ITR-2 or ITR-1 + Form 10E
If any portion of benefit is taxable (e.g. excess gratuity beyond exemption limits) → Ensure it's reported under Salary.
If you have multiple sources of income or capital gains → ITR-1 is not allowed.
🧾 Example:
Let’s say a retired government employee received:
Pension: ₹4,20,000/year → Shown as Salary
Gratuity: ₹20,00,000 → Fully exempt → Show in “Exempt Income”
Leave encashment: ₹3,00,000 → Fully exempt → “Exempt Income”
✅ When can Retirement Benefits be shown in ITR-1?
ITR-1 can be used if:
You are a salaried individual or pensioner (excluding business/professional income).
Total income is up to ₹50 lakh.
You do not have capital gains, house property more than one, or foreign assets.
Retirement benefits like gratuity, commuted pension, leave encashment, and PF withdrawal are fully or partially exempt under Sections 10(10), 10(10A), 10(10AA), or 10(11)/(12).
📌 Where to Report Retirement Benefits in ITR-1?
Pension (Uncommuted)
Treated as salary income → Show under "Salary/Pension" in the “Income Details” section.
Gratuity / Leave Encashment / Commuted Pension / PF
These are exempt incomes, so:
Enter taxable portion (if any) in "Salary"
Enter exempt portion under “Exempt Income” > “Others” (Schedule EI)
Example for "Others":
bash
Copy
Edit
Gratuity received on retirement - Exempt u/s 10(10)
Commuted Pension - Exempt u/s 10(10A)
Leave encashment - Exempt u/s 10(10AA)
PF withdrawal - Exempt u/s 10(12)
⚠️ When NOT to Use ITR-1 for Retirement Benefits?
If you received retirement benefits in arrears → Use ITR-2 or ITR-1 + Form 10E
If any portion of benefit is taxable (e.g. excess gratuity beyond exemption limits) → Ensure it's reported under Salary.
If you have multiple sources of income or capital gains → ITR-1 is not allowed.
🧾 Example:
Let’s say a retired government employee received:
Pension: ₹4,20,000/year → Shown as Salary
Gratuity: ₹20,00,000 → Fully exempt → Show in “Exempt Income”
Leave encashment: ₹3,00,000 → Fully exempt → “Exempt Income”
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