Itr1 or itr2 if exempt income us10 is more than rs. 5000

sushil kumar ( CA Final-Audit Assistant) (528 Points)
Replied 14 July 2014

Dear Vaibhav,

You have to file ITR 1. However if you filed ITR 2 there is no problem at all. Travelling allownce is the part of salary. If you have other source of income which have more than Rs. 5000(e.g. Interest on SB A/c) then you should file ITR 2.

1 Like

Tribhuvan Aditya Singh (Student as well as Self-employed) (3710 Points)
Replied 14 July 2014

you can file itr-1.. limit of 5000 relates to dividend income, gifts recvd, agriculture income, etc. that are exempt u/s 10 and not to allowances.... allowances u/s 10 are allowed as deduction from salary and they are not treated as exempt income.. therefore you can file itr-1

Vaibhav Joshi (others) (45 Points)
Replied 15 July 2014

Originally posted by : sushil kumar
	Dear Vaibhav, You have to file ITR 1. However if you filed ITR 2 there is no problem at all. Travelling allownce is the part of salary. If you have other source of income which have more than Rs. 5000(e.g. Interest on SB A/c) then you should file ITR 2.

Thank you Sushil for the answer.

However, SB A/c interest comes under section 80 tta as per my understanding and not in section 10. So is it necessary to file ITR2 even if the interest is more than Rs. 5000?

Regards,

-Vaibhav

Tribhuvan Aditya Singh (Student as well as Self-employed) (3710 Points)
Replied 15 July 2014

@ vaibahv.... yes intt on savings comes under 80tta... no need to file itr-2, you can file itr-1 even if intt on saving is more than 5000

1 Like

sushil kumar ( CA Final-Audit Assistant) (528 Points)
Replied 15 July 2014

Dear vaibhav,

i agree with you that Intt on SB A/c upto 10000 is exempt u/s 80TTA. However i didnt tell you that amount are exempt in section 10. However I have mentioned by mistake SB intt instead of FD intt.

Ajay (CA Job) (512 Points)
Replied 15 July 2014

Dear Vaibhav

Strictly speaking, even the allowances are "Exempt Income" or "Income Not included in Total Income" as they fall under Sections 10 - "Income not included in Total income".

Now for ITR filing purpose, i feel as far your income from sources such as "Exempted Interest income, Exempted dividend income, exempted LTCG, Agricultural income" is Rs.5,000 or less (which we normally declare in the Schedule EI of ITR-2 or for that matter, other ITRs), you can use ITR-1 even if the exempt allowances (normally disclosed in the Salary Sheet) is more than Rs.5000.

The reason I feel so is that the instructions for ITR-1 SAHAJ give option to fill Salary income as per TDS Certificate which would have already considered Exempt Allowances to arrive at the Taxable Salary. Whereas Instruction for Item D22 asks to fill in details of exempt income like dividend income, agri income etc. but specifically asks to use ITR-2 if the exempt income is more than Rs.5000.

Regards

Ajay

1 Like

Vaibhav Joshi (others) (45 Points)
Replied 16 July 2014

Thanks for the detailed explanation, Ajay. It has convinced me to go with ITR1 this time.

I just hope it will not create any problems for me that I had filed ITR2 in the last year and ITR1 in this year.

Regards,

-Vaibhav

Ajay (CA Job) (512 Points)
Replied 16 July 2014

Dear Vaibhav I think ITR-1 is more like a subset/simplified version of ITR-2. The latter has more details than the former. So, last year as long as all your income fit into the return, you need not worry. Regards Ajay

2 Like

Vaibhav Joshi (others) (45 Points)
Replied 23 July 2014

Dear experts,

PPF interest created a question in my mind w.r.t. item 29 in ITR1 form.
Item 29 says if exempt income is more than Rs. 5000, use ITR2.

Here is the question: does PPF interest come under this exempt income?

It is only on accrual basis, because you cannot withdraw it at least for the first 6 years, I think.
So, is it required to declare this accrued interest as exempt income? If yes (& more than Rs. 5000) then I guess ITR2 will be appropriate form for most salaried people.

Thanks & regards,

-Vaibhav

Tribhuvan Aditya Singh (Student as well as Self-employed) (3710 Points)
Replied 23 July 2014

yes, if ppf intt exceeds 5000 then you need to file itr-2

Dharmesh Runwal (Mumbai) (31 Points)
Replied 27 July 2015

Dear Sir

I am Salaried person and i have loss from share trading this year Rs.30000/- and income tax deduct on my share transcation is 8491/- but my total taxable income is nill.Can i claim for this amount in my itr return and which itr is better for this nature itr2 or itr 4

Chetan Mamadapur (1 Points)
Replied 03 July 2016

Hi

I have got more than 5K exemption under section 10 under my net salary. Under which section should i declare this exemption while filing ITR online ?

J S BHAVSAR (CONSULTING) (1288 Points)
Replied 03 July 2018

Is exempt income clause of Rs 5000 limit still applicable on AY 2018-19? i.e. if EI is more than Rs 5000 (interest including PPF) then one need to file ITR2.

Currently ITR1 itself is taking the value of Any Other in Line 27 (d) (1) where I enter more than 5000 as PPF interest, it is taking without any error. The ITR1 alone does not stop me from reporting EI more than 5000 (except Agriculture income).

So if a assessee has PPF interest more than Rs 5000 and all other sources of income is interest and other source, should ITR2 be filed or ITR1 can be filed this AY?