Dividend income above Rs 5000 should be included while computing total income or not ?

Its taxable u/h. IFOS, hence any dividend income should be declared for assessment. While you can claim the TDS in ITR.

As per Section 194, TDS shall be applicable to dividends distributed, declared or paid on or after 01-04-2020, an Indian company shall deduct tax at the rate of 10% from dividend distributed to the resident shareholders if the aggregate amount of dividend distributed or paid during the financial year to a shareholder exceeds Rs. 5,000.

Clarify, what is wrong?

The answer is for TDS deduction based on recent amendment and not its exemption. Its taxable in the hands of dividend receipant.