Diff between exemption & exempt income
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
29 July 2014
if a person receives exempted allowance like conveyance allowance. will he file ITR-1 or ITR-2?
Reply Urgently........
Reply Urgently........
29 July 2014
ITR 1
29 July 2014
https://www.caclubindia.com/experts/income-tax-return-1805524.asp#.U9dvKvmSzUs
Debated at length. Check out from above link.
Debated at length. Check out from above link.
30 July 2014
Dear Umesh ji,
how come ITR1??
Dear querist, there is no difference between two from income tax perspective. Rest is available at the link provided by Sanjay ji.
how come ITR1??
Dear querist, there is no difference between two from income tax perspective. Rest is available at the link provided by Sanjay ji.
30 July 2014
The querist asked question for allowance like conveyance allowance, HRA etc so he should file ITR-1.
@ Nikhil Ji Go to immediate prospective, what he is trying to say. When I answer the question, I tired to put it simple thinking the queirst is novice and do not try to confuse him. If he has other issue, he will rise in subsequent question.
@ Nikhil Ji Go to immediate prospective, what he is trying to say. When I answer the question, I tired to put it simple thinking the queirst is novice and do not try to confuse him. If he has other issue, he will rise in subsequent question.
30 July 2014
Dear Umesh,
You cannot file ITR1 even if there is only HRA allowance etc (where exemption is claimed in excess of Rs 5,000)
You cannot file ITR1 even if there is only HRA allowance etc (where exemption is claimed in excess of Rs 5,000)
30 July 2014
Additionally itr-1 will not at all accept if any exempt income as per sec 10 under any clause exceeds rs 5,000 as specifically u need to file itr2 only as nikhil suggested.
30 July 2014
I beg to differ Nikhil and Tushar, I think if your exempted income which is not coming under 5 heads are more than 5000, then you are required to file ITR 2. For eg Dividend income, ag. income, LTCG of listed shares etc is more than 5000, you need to file ITR-2
30 July 2014
Dear Umesh ji this is the point of debate. Pease visit link given above. The same has been debated at length.
30 July 2014
Dear Umesh ji this is the point of debate. Pease visit link given above. The same has been debated at length.
30 July 2014
Dear Umesh Ji,
If you may please note that LTCG comes under "capital gains" but on shares it has been exempted!!
Dividends are taxed under Other incomes but have been exempted under section 10. agriculture income is business income but has again has been exempted under section 10!
same applies for HRA, and other allowances.
For simplification:
Dividend - taxing section 56(2)(i). exempted under 10(34)
Capital gains: taxable under section 45. exempted for ltcg on shares under 10(38).
The differentiation you are trying to make doesn't exist. Be is capital gains or be it hra or lta or conveyance allowance, all are covered under section 10 of the income - tax act.
there is no need for an aggressive tax advice on matters which are tax neutral.
If you may please note that LTCG comes under "capital gains" but on shares it has been exempted!!
Dividends are taxed under Other incomes but have been exempted under section 10. agriculture income is business income but has again has been exempted under section 10!
same applies for HRA, and other allowances.
For simplification:
Dividend - taxing section 56(2)(i). exempted under 10(34)
Capital gains: taxable under section 45. exempted for ltcg on shares under 10(38).
The differentiation you are trying to make doesn't exist. Be is capital gains or be it hra or lta or conveyance allowance, all are covered under section 10 of the income - tax act.
there is no need for an aggressive tax advice on matters which are tax neutral.
30 July 2014
It can be argue that in such case ITR 2 is to be filled citing strict interpretation of Rule. If such interpretation is hold true, the very purpose of introducing the form SAHAJ will be defected.
30 July 2014
the purpose was also set by it dept and this concept of itr-2 to be filed by those who have income exempted above 5000 was also introduced by itd so they are very well aware about this fact and its an intentional act by them so how come the purpose is defected.
30 July 2014
not necessarily Umesh Ji.
It is not about strict or liberal interpretation. It is just that section 10 is the section that includes all the incomes that are exempted from tax. But all these exemptions pertain to incomes which if the exemption is not provided will be taxed under one head or the other.
regardless, I have ample number of cases where ITR1 is to be filed despite the rule 12.
This year itself my team has filed 11 such returns legitimately. For eg: somebody earning only income from house property. A person only receiving pension income and interest income etc etc.
The same discussion applies to ITR4S too. even in 44Ad cases many tax consultants have wrongly filed ITR4S instead of ITR4.
Given that there is no difference in tax liability, it is important that we give our clients a neutral advice and file the correct return only.
It is not about strict or liberal interpretation. It is just that section 10 is the section that includes all the incomes that are exempted from tax. But all these exemptions pertain to incomes which if the exemption is not provided will be taxed under one head or the other.
regardless, I have ample number of cases where ITR1 is to be filed despite the rule 12.
This year itself my team has filed 11 such returns legitimately. For eg: somebody earning only income from house property. A person only receiving pension income and interest income etc etc.
The same discussion applies to ITR4S too. even in 44Ad cases many tax consultants have wrongly filed ITR4S instead of ITR4.
Given that there is no difference in tax liability, it is important that we give our clients a neutral advice and file the correct return only.
30 July 2014
Tushar do not say ITR1 is not accepted. It is being accepted even when IT Department has the details of salary structure of employees from 24Q filed by employer. In ITR1 there is no place to mention allowance exempt u/s 10.
In many cases emplyeees claimg HRA in exccess of Rs 5000 are filing ITR1 and the same is being processed and accepted.
In many cases emplyeees claimg HRA in exccess of Rs 5000 are filing ITR1 and the same is being processed and accepted.
30 July 2014
no sanjay bhai its not accepting in case if its exceeding 5,000..............
30 July 2014
Dear Sanjay Ji. as discussed earlier, acceptance of return and issuance of 143(1) intimation is not equivalent to saying that it is a correct return.
I just have a closing comment to this elongated discussion.
Income-tax Act has a defined structure wherein each chapter covers a specific topic. Section 10 deals with incomes not to be included in taxable income.
Where the exemption is not available such as HRA allowance received but no rent paid, such income shall be taxed under relevant heads of Income, be it salary, capital gains, busines income, other incomes etc etc.
If we accept the argument that HRA is different from dividend, then we are trying to create a difference which doesn't exist.
ITR1 and ITR4S are supposed to cover only the simplest of tax assessees. Everyone else is to be covered under ITR2 and ITR4. The same applies to ITR3 and ITR4 debate. Where a partner is only receiving income from partnership and some other incomes, ITR3 can be filed but the moment there is an additional business income source, ITR4 shall apply to him.
I just have a closing comment to this elongated discussion.
Income-tax Act has a defined structure wherein each chapter covers a specific topic. Section 10 deals with incomes not to be included in taxable income.
Where the exemption is not available such as HRA allowance received but no rent paid, such income shall be taxed under relevant heads of Income, be it salary, capital gains, busines income, other incomes etc etc.
If we accept the argument that HRA is different from dividend, then we are trying to create a difference which doesn't exist.
ITR1 and ITR4S are supposed to cover only the simplest of tax assessees. Everyone else is to be covered under ITR2 and ITR4. The same applies to ITR3 and ITR4 debate. Where a partner is only receiving income from partnership and some other incomes, ITR3 can be filed but the moment there is an additional business income source, ITR4 shall apply to him.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- IT Return filed defective u/s 139 (9)
- Fixed Deposit Claim Relinquishment by the Nominee
- ITR 6 Schedule CFL and UD Issues
- NR GST NUMBER
- For REQUIRE INDIVIDUAL GST
- Not a CA , can we prepare balance sheet
- FREELANCING ACCOUNTANT
- GST Form ADT-02
- TCS ON SOFTWARE SALES
- Income Type for interest from government bonds
- Query Regarding on TDS section 194H and 194J
- TDS on purchase of value vouchers for employees ?
- PAYMENT TO OPEN AI AND ENVATO ELEMENT
- From 15CA for remittance by domestic travel agent by to Foreign Destination Management Company.
- Issue of gst e invoice
- Interchangeable words in accounts
- Adjusted profit/Loss in the case of LLP and Pvt. Ltd.company
- How to adjusted advances given or receipt
- Foreign vendor without PAN unable to to register due to non receipt of OTP on foreign number ?
- 133(6) DIN INVALID format error - ->WHERE TO REPLY 133(6) notice?
Trending Online Classes
-
Excel Mastery Program
CA Rishabh Pugalia
CAclubindia
