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How To Report Tax Exempt Income In ITR-1?


Individual tax payers should be aware that changes have been introduced to the ITR-1 form for the financial year 2018-19.


Like most taxpayers in India, you too may have made some investments, like that on an endowment life insurance policy, to save on income tax paid. As you prepare to file your income tax returns (ITR) this year and make claims on the said investments, you should note that there has been a change.

In the previous year, you had to report your tax exempt incomes under the tab "Taxes Paid & Verification," however, this year, you will be reporting it in the tab "Computation of income and tax." It is the third tab in the online ITR-1 form on the Income Tax department's official e-filing website. The tab has a drop down for 16 sub-heads to report tax-saving deductions under sections 80C to 80U.

Here are some of the popular tax exempt incomes that may be part of your ITR for FY 2018-19 and how to report them in ITR-1 form:

Life insurance policy maturity proceeds

Life insurance policy maturity proceeds

Under the head 'Exempt Income,' select the 'Section 10(10D) - Any sum received under life insurance policy, including sum allocated by the way of bonus on such policy except sum as mentioned in sub clause (a) to (d) of Section 10(10D)' option to report the proceeds received on your endowment life insurance policy on maturity.

Note that there are some conditions under which such an income is exempt from tax. For example, the premium paid during any year cannot exceed 20 percent of the actual sum assured for a policy issued between 1 April 2003 and 31 March 2012. Similarly, amount received on surrendering insurance policy may be taxable under certain situations.

Dividend Income

Dividend Income

Any income earned as 'dividend' by shareholders is tax exempt up to Rs 10 lakh. Whether or not the dividend income you made during the year exceeds Rs 10 lakh in a year, you are required to report it in the ITR.

Select 'Section 10(34) (Exempted Dividend Income)' in the tab to report the same.

If your dividend income exceed Rs 10 lakh in a financial year, a 10 percent tax will be charged on it.

If you have received dividend from a foreign company, it will be taxable under the head 'Income from other sources.'

Agriculture income

Agriculture income

If you earned an agriculture income that does not exceed Rs 5,000 in the FY 2018-19, you can report it under 'Agriculture income' from the drop down menu and enter the amount.

If your agricultural income is beyond Rs 5,000, you have to file ITR 2 or ITR 3, as the case may be.

Any other income

Any other income

Most of sections for reporting the income and a description about them are given in the drop down clearly.

For usual tax exempt incomes like maturity of a PPF (Public Provident Fund) account or interest earned on such account, you can simply choose from the drop down.

If you have any other income that is not specified therein, select 'Any Other' and provide description on the income and amount.

Read more about: income tax itr tax tax free
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