By Chirag Nangia
Do we want to declare interest from post offices savings account, PPF and month-to-month earnings scheme (MIS) in ITR? If so, beneath which head and which ITR type?
—Amitesh Kumar
A taxpayer is essential to disclose earnings from all sources whilst filing an ITR, even if deduction/ exemption is readily available with regards to such earnings. So you ought to disclose interest from savings account, PPF and MIS in the ITR. Interest earnings from savings account in post workplace and MIS is supposed to be reported in ‘Schedule OS’ whereas interest from PPF (getting exempt) is to be disclosed as ‘other exempt income’ in Schedule EI of the relevant ITR type. These schedules are the very same in all ITRs.
ITR 1 may perhaps be filed if your total earnings is up to Rs 50 lakh and comprises earnings only from salaries, one residence house, other sources (interest, and so forth.) and agricultural earnings up to Rs 5,000. In case you also have earnings beneath the head ‘capital gains’, you will be essential to report particulars of earnings in ITR 2. Alternatively, if you derive earnings from business enterprise/ profession then disclosure shall have to be made in ITR 3. Section 80TTA entitles an person to claim deduction of the interest earned on savings accounts held with a bank, cooperative society or post workplace, up to Rs 10,000. In case of senior citizens, this limit is enhanced up to Rs 50,000 as per Section 80TTB. These deductions may perhaps be claimed, whilst filing ITR.
l I paid `2 lakh a year for 10 years for a pension program exactly where I can commute 1/3 which is tax no cost and the balance has to be invested in month-to-month pension. The fund worth is `33 lakh. Is the commuted portion of the corpus (`11 lakh) tax no cost or 1/3 of the premium paid (`6.66 lakh) tax no cost?
—A Ramanujam
Commuted worth of pension received by government workers is totally exempt. However, commuted worth of pension received by any other employee would be exempt in the following manner:
a) situations exactly where employee receives gratuity- commuted worth of 1/3rd of pension which the employee is ordinarily entitled to acquire
b) in any other case- The commuted worth of 1/2 of the pension which the employee is ordinarily entitled to acquire.
Consequently, if you acquire gratuity, 1/3rd of the corpus shall be tax exempt.
The writer is director, Nangia Andersen India. Send your queries to