Itr-2 filing - value for salaries

Tax queries 1649 views 4 replies

shiva

manager

34 Points Joined July 2009

Hello:

my Form 16 from my employer lists my gross salary. it then goes on to deduct any rent allowance, transport alowance and childrens education allowance, after all the deductions, it lists my final salary under "Income chargeable under the head salaries'.

example: gross salary - 10 lakhs

rent - 100000, transport allowance - 2000, childrens education allowance - 2400

Income chargable under the head salaries = 10,00,000 - 1,00,000 - 2,000 - 2,400 = 8,95,600

question:

based on my understanding, the salary i need to use for tax filing is INR 8,95,600 right ?

is it 10,00,000 ???

I am asking this because i receiving a letter from CPC where they are using the 10,00,000 and have calculated my tax instead of lower number and want me to pay the difference in tax along with interest.

If the lower number is infact correct, how should i report the error

i guess if the higher number is correct, i will have to pay :-(

appreciate your response and suggestion.

Replies (4)

ANKIT CHOPRA

32 Points Joined September 2009

As per my views 8,95,600

Yogesh Goel

Chartered Accountant

192 Points Joined July 2011

Dear Shiva Sir,

Taxable salary in the example given by you shall be 995600 since rent allowance received by you is taxable and chargeable to tax unless you are paying rent. If you are paying rent then only HRA (House rent allowance) be shall be exempt (only to an extent or in full as the case may be according to amount of rent paid). However, It was only an example. If actual allowances are different (other then HRA) there may be a different position. Intimation received by you from CPC must be taxing 10,00,000 due to wrong filing of return. If you have filed your return with only rs 895600 (as in present example deeming it as income chargeable under head salaries) you would not be receiving intimation taxing rs 10,00,000.

Rakesh Gupta

Vice President Finance

92 Points Joined December 2009

Dear Shiva,

ITR-2 asks for salary details in the following manner:

Salary (Excluding all allowances, perquisites & profit in lieu of salary)..			1	895600
Allowances exempt under section 10	2	104800
Allowances not exempt			3	0
Value of perquisites			4	0
Profits in lieu of salary			5	0
Income chargeable under the Head ‘Salaries’ (1+3+4+5)			6	895600
		Total		895600

I have fileld up the details as per your example assuming that all what you get as allowances are exempt under various sections of Sec. 10. In case if your allowances are not fully exempt you need to accordingly bifurcate them between column 2 & 3. Further you are also eligible for Professional Tax Deduction U/s 16 (in case if your employer is deducting form your salary and depositing to the State Treasury). In that case the amount mentioned under colum 1 shall be reduced by P.Tax fiugre.

Regards

Rakesh

shiva

manager

34 Points Joined July 2009

Ankit - Thanx

Yogesh Goel - the rent I have listed is what I am paying :-) sorry for the confusion.

Rakesh Gupta - Appreciate your detailed response.

I downloaded the excel version from the directorate of income tax and recalculated it once again and I am getting 8.95,600 as well. I am not sure why they are using 10,00,000.

I have submitted a rectification along with the generated xml. hopefully they will review my filing once again and correct it. fingers crossed :-)