Exempt income for tax filing purpose

salary income will arrived after consider sec 10 exemption. if more than 1 house property income received by an assessee then he needs to be filed ITR 2 ( Exempt income is reporting purpose only) 

There are many friendly employers who design the pay structure enabling the employees to save tax or even evade tax in some cases, and as well as reduce their own administrative burden. And to tap this design, IT dept has come up with forms and rules where the employees are forced to use ITR-2 and shell out more information to the IT dept, which is not entirely in the employee's interest. 

Finally what all should be considered in "Exempt Income"?

a) Interest Income - > Is there a need to declare PPF interest which was merely credited in PPF bank account. Main question is what will the taxman do by knowing "Interest income that is free from tax". I believe this Interest Income could be a line for NRI taxfilers who have NRE deposits which yield tax free interest. I may be wrong.

Does EPF interest credited to EPF account get considered here? Employees like me have not received PF slips for 3 years. So once we receive PF slips, then we file revised returns?

Should Sec 10 (Conveyance) be considered while arriving Rs 5000 calculation?

Originally posted by : Gowtham
	salary income will arrived after consider sec 10 exemption. if more than 1 house property income received by an assessee then he needs to be filed ITR 2 ( Exempt income is reporting purpose only)

@ Gowtham, Yes I get that salary is net of such allowances.B ut for reporting purpose, ITR1 clearly says, if exempt income more than Rs 5000, use ITR2. Hence, the question on what constitutes exempt Income arises. Does it include Section 10 salary allowances that are exempt. If so, most people will have no use for ITR1 because their Section 10 exempt income will exceed Rs 5000 very likely. 

Instructions for filing ITR-2 Schedule-EI:

Schedule-EI

(i) Furnish the details of income like agriculture income, interest, dividend, etc. which is exempt from tax.

(ii) The details may be filled on cash basis unless there is any provision/ requirement to declare them on accrual basis.

The breakup of the word “interest” is missing to say which components in which scenario are "interest income". It could be NRE deposit interest for those who are NRI if filing ITR-2 as “Non Resident” then such NRE deposits fetch tax free interest every year. Not sure.

Kind request that someone clarify whether accrued PPF interest in PPF account is part of Exempt Income and if there is any reference to this matter from CBDT.

Rs 5000 Exempt Income limit is "annual" and not monthly. Income that was already taken care on arriving your income under the head salaries is not required to be considered in that Rs 5000 limit. Eg dont consider conveyance allowance if the same was Rs 9600 per year.

Whether PPF interest accrued and credited in PPF account is to be considered, I am looking for reference to that kind. Most of them here have said it has to be considered. Then why not consider EPF interest that was credited to EPF account? There is silence. CBDT reference to Exempt Income is not traceable. ITR-2 filing instructions for Schedule-EI are very brief and not detailing as to which items fall under which category to consideration. Hence issue is left with experts and individuals to decide what constitutes and what not. 

Till today I do not know whether PPF interest accrued into the PPF account (not received in the hands of the taxpayer ) is Exempt Income.

Can someone clarify?

EPF (Provident Fund) interest also accrues into the PF account. Should that be declared?

As I understand, from AY 2015-16, the requirement of using ITR2 if Exempt Income goes above Rs 5000 is abolished. So one can use ITR1 even if Exempt Income goes above Rs 5000.