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Bifurcating salary and allowance

SHIRISH S S (Proprietor) (1030 Points)

05 July 2018

I am filing my wife's ITR-1. She has filled 95 percent. But bifurcation between Salary and allowance is not done.

Out of these what is salary and what is allowance.

1) Basic Pay 2) DA or DA arrears 3) Temp spl Pay 4) Fixed Personal allowance 5) Professional qual pay 6) Special allowance Basic 7) Special allowance DA 8) Special pay 9) Transport allowance 10) Dearness allowance 11) HRA 12) Leave encashment 13) LTC.

If someone can throw light on this it will be better so that i can finalize and upload the return.

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4 Replies

Anjali P Nair (ACA,ACMA) (582 Points)
Replied 05 July 2018

A Salary

1. Basic Pay

2. Temporary special pay(if it is for overtime work it can be shown as over time allowance)

3.Professional qualification pay

4.Special allowance basic

5. Special pay

6.Leave Encashment

B Allowances

1. DA & DA Arrear

2.Fixed personal Allowance

3.Special allowance DA

4.Transport Allowance( you can claim exemption of Rs.1600/month ie 19200/year as exemption)

5.Dearness Allowance/DA

6.HRA(You can claim deduction if you are staying in a rented house)

The deduction available is the least of the following amounts:

a. Actual HRA received;

b. 50% of [basic salary + DA] for those living in metro cities (40% for non-metros); or

c. Actual rent paid less 10% of basic salary + DA

C Perquisites

1. LTC

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SHIRISH S S (Proprietor) (1030 Points)
Replied 05 July 2018

Thanks for your reply.

The 26AS shows gross income which includes Trasport allowance plus Profession tax .

in ITR-1 PT can be deducted u/s 16. Where to deduct transport allowance?

There may be mismatch in return if written under salary.

Anjali P Nair (ACA,ACMA) (582 Points)
Replied 05 July 2018

Form 16 part B specifically mentions gross salary and allowances exempt under section 10.

Income from salary to be shown seperately under following heads.

Salary excluding allowances & perquisites+Allowances not exemt(Deduct exempted allowances from total allowance and balance need to be shown)+Perquisite value need to be seperately disclosed.

J S BHAVSAR (CONSULTING) (1288 Points)
Replied 09 July 2018

Why is Income tax department creating so confusion of the ITR forms especially with the mentioning of the income, subtracting of the allowances and still mentioning the exempt allowances?

Could there be a hidden agenda behind creating complications in ITR forms?