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.
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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:
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
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.
Here are some posts which can help you with e-filing of Income Tax Return:
- Calculate your Tax liability for AY 2021-22 (FY 2020-21)
- How to Claim Tax Exemptions while filing ITR?
- Use Challan 280 to Pay Self Assessment Tax Online
- Form 26AS – Verify Before Filing Tax Return
- 5 Ways to e-Verify your Income Tax Returns
- What if You DO NOT file your Returns by due Date?
- Can I file my Last Year Tax Return?
- Why and How to Revise Your Tax Return?
- What does Intimation U/S 143(1) of Income Tax Act mean?
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
This is how we fill it in exempt allowance section:
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.
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”.
Yes It worked, thak you so much.
I filled Allowance to the extent exempt u/s 10 under Taxes Paid & Verification tab >> Exempt Income (For reporting purposes) >> fill (iv) others. But this amount is not refelected in the total taxable income. (I expect the exempt income should be dedcuted from Gross Salary and the income chargeble under the head salary should be calculated accordingly.
But this is not happening, and hence my total tax calculated in ITR is more than the on in Form 16.
Could you please help?
Where we have to deduct the exempt income and put that figure in return
It would not deduct automatically. In your salary you should deduct the exempt income and put that figure in salary.
Hi Amit,
In my case it is like this
tab “Computation of Income and Tax”, Income chargeable under the head “Salaries”(i+ii+iii+iv+v) = 7,00,000 ;
tab “Tax Details”, Income chargeable under Salaries [col(3)]= 8,00,000.
I am also getting same error
I entered in “Tax Paid and verification as you mentioned.
Now I am stuck up for next step, do I need to change value in tab “Tax Details”, Income chargeable under Salaries [col(3)]=7,00,000.
Please let me know.
Thanks,
Manjnath
Hi Amit,
it is not clear for me. Can you tell me little more detail how I can adjsust.
Thanks,
Manjunath
very nice post…..issue resolved…thanks a lot.
very useful post
Hi
My head Salary ( Excluding all allowances ) is 6 lakhs but in TDS1 Income chargeable as 7.6 lakhs, resulting while submitting the ITR1, the error showing as “”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””
Pls help to resolve the same
Hi,
I have entered amt in exemption allowance under headers HRA, Leave Encashment. Can you please help under which headers, do EPF and Gratuity go? Will these come under”Any Other”.
Thanks in Advance.
Yashul
Yes
Hi Amit- So should we now enter the gross income in Salary or net (under B1)
Net
Thanks for the help :).
Sir,
Even I was getting same error as mentioned by you. Against tax details, against income chargeable under head salaries if i correct the income to the one mentioned in form 16 point 6 – then error is not appearing – can this also be done ?
yes but that is not the right way to do. You may get notice for mismatch between Form 16 & Form 26AS
Hi Amit,
In Tax details tab in ITR1, details of Tax deducted at source from Salary not showing full amount as it’s showing only 3 quarter of salary given to me by my company and last quarter income not coming even though in 26AS it’s showing full 4 quarter salary credited and tax deducted.
So i have manually added 1 entry in of last quarter.is it fine or i have to contact my employer for the same.
Yes you can just update the numbers in ITR 1. If its showing correctly in 26AS no need to contact employer.
Hi Amit,
I filled Allowance to the extent exempt u/s 10 under Taxes Paid & Verification tab >> Exempt Income (For reporting purposes) >> fill (iv) others. But this amount is not refelected in the total taxable income. (I expect the exempt income should be dedcuted from Gross Salary and the income chargeble under the head salary should be calculated accordingly.
But this is not happening, and hence my total tax calculated in ITR is more than the on in Form 16.
Could you please help?
It would not deduct automatically. In your salary you should deduct the exempt income and put that figure.
Thank you so much sir…. Helped me a lot
Excellent
Thanks it help me a lot 🙂