Since the amount disclosed in income chargeable under the head salaries is less than 90% of Salary reported in TDS 1, please ensure to fill details in Others in Exempt Income

Since the amount disclosed in income chargeable under the head salaries is less than 90% of Salary reported in TDS 1, please ensure to fill details in Others in Exempt Income – an error that many of salaried tax payers are facing while filing their income tax returns. In this post we tell you why you get this error and the way around.

Error while filing ITR - amount disclosed in income chargeable under the head salaries is less than
Error while filing ITR – amount disclosed in income chargeable under the head salaries is less than 90% …

How to Pay 0 Income Tax on Salary of Rs 20+ Lakh?

Salary components and salary structure plays a very important role in how much income tax you pay. We have come up with some optimised salary structure using which you pay NO income tax even with CTC of more than Rs 20 Lakhs.

Why the Error?

This error occurs when your gross salary as reported by your employer in Form 26AS is higher than the one quoted by you from Form 16 while filing your tax return.

Your Form 26AS numbers matches with what is quoted in Form 16 – Part A by your employer. Below is a sample:

Form 16 Vs Form 26AS
Form 16 Vs Form 26AS

While filing the return online, the ITR Form automatically picks up data from Form 26AS. You can check the same in Tax Details tab >> Sch TDS 1 as shown below

TDS 1 - Details of Tax deducted at Source from Salary
TDS 1 – Details of Tax deducted at Source from Salary

The above salary in the header “Income chargeable under salaries” is Gross salary (as can be seen in the Form 16 Part B below) but while filing your return, you need to put only your Net salary.

Net salary = Gross Salary – Tax Free Allowances

The error occurs when Net Salary is less than 90% of gross salary & you do not report the tax-free allowances in exempted income section of ITR

Like in this case the Gross Salary is Rs 15,86,610 and net salary is Rs 13,12,938. The percentage of Net to Gross salary is 83%. Since this is less than 90%, you get the error.

Gross Salary Vs Net Salary - Form 16
Gross Salary Vs Net Salary – Form 16

Here are some posts which can help you with e-filing of Income Tax Return:

to Correct the error?

The error is easy to correct. All you need to do is report your tax-free allowances in the exempt income section. This can be done as follows for ITR 1.

Go to Taxes Paid & Verification tab >> Exempt Income (For reporting purposes) >> fill (iv) others. As per the above Form 16, we have below 3 tax-free allowances

Tax Free Allowance in Salary
Tax Free Allowance in Salary

This is how we fill it in exempt allowance section:

Filling Exempt Allowance Section in ITR 1
Filling Exempt Allowance Section in ITR 1

If you notice there are several headers under exempt allowance, which you can choose as per your requirement. Below is the list of exempt allowances header in ITR 1.

Exempt Allowances that are available for ITR 1
Exempt Allowances that are available for ITR 1

I hope this post would help you to understand and resolve the error in ITR “The amount of salary disclosed in Income details/Part BTI is less than 90% of Salary reported in Schedule TDS1”.

55 thoughts on “Since the amount disclosed in income chargeable under the head salaries is less than 90% of Salary reported in TDS 1, please ensure to fill details in Others in Exempt Income”

  1. salary slip has 2 sides ; left side shows gross salary like basic , ta , da , hra , nps share by employer etc. right side shows deductions like leave recovery , tds , nps share by employer , nps share by emploee and welfare scheme defuction.

    I want to ask that the gross salary shown in the very first line of form 16 is what ?
    options are:-
    a ) – gross salary in salary slip
    b) – gross salary in salary slip minus right side deductions in salary slip i.e. net salary
    c) – gross salary in salary slip minus nps share by employer
    d )- any thing else

  2. Apart from salary, in TDS 2 section bank details is already updated with the income or interest. Again do i need to fill the exempt income information as the same. If yes then should we need to enter tax amount or interest amount in any listed category?

  3. Hi Amit,

    How can get to know the details of “Allowance to the extent exempt u/s 10”, as only the amount is mentioned in my Form 16 without any details.

    Thank
    Ramandeep

  4. Hello Amit,

    But my Gross salary in Form 16 and Form 26AS is different in that what i need to do.

    If i fill that Exempt income after that i don’t get error. But I don’t understand why the Gross Income in Form 16 and form 26As is different.

    Now i dont get any error but is there any possibility that i will need to pay extra tax after that.

  5. Accurate guidelines provided in this blog.. Thank you very much.

    I could be able to submit my return today which was pending since 15th July 2018.

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