Salary Income u/s 5(1) of the Income Tax Act refers to an Individual receiving any of the following from its employer:
- Wage
- Annuity
- Pension
- Gratuity
- Fees
- Commissions
- Perquisites
- Profits in lieu of salary
- Advance of salary
- Leave encashment etc
However, taxpayers who receive an SMS or any communication via call or email from ITD are likely to face some verification issues in their ITRs. Taxpayers can receive the SMS for three reasons:
- Not filed ITR or even if the ITR is not filed in the given assessment year and has potential tax liability pending.
- It also happens if the details provided by taxpayers and Information received to the ITD don’t match for that particular assessment year.
- Significant transactions get reported to the Income Tax department during a financial year which is considered abnormal or out of line with the profile of the taxpayer.
Taxpayers who have received any such verification issue needs to submit a response on those issues raised. Additionally, the response has to be submitted online by logging into the compliance portal.
Verification issue in the computation of tax liability from Salary Income
| Code | Description | Response |
| A1 | Total receipts as per taxpayer pertaining to the above information | Amount |
| A2 | Less: Amount relating to another year/PAN | PAN year-wise list |
| A3 | Less: Amount covered in other information | Amount |
| A4 | Less: Exemption/Deduction/Expenditure/ Set off of Loss | Exemption/Deduction wise list |
| A5 | Income/Gains/Loss (A1-A2-A3-A4) | Computed |
A1- Total receipts:
Any gross salary received from the employer. Moreover, all the components of the salary should be included and a final amount should be mentioned.
A2- Amount relating to other year or PAN:
If part of the salary relates to someone else’s PAN or is considered for some other year then the List of details of such salary is to be mentioned as per the table below:
A3- Amount repeatedly covered:
If any amount is mistakenly covered twice then it should be mentioned under the Remarks section of the previous table. This will nullify the repeated Income/Gains/Loss covered.
A4- Exemption/Deduction/Expenditure/Set off of loss:
This section has to include gross salary and a list of all the available allowances which are exempt. The taxpayer needs to select the correct category from the drop-down list as under:
- Income is not taxable in India (Non-Resident)
- Exemption related to
- House Rent Allowance u/s10(13A)
- Leave Travel Allowance u/s 10(5)
- Encashment of Leave u/s 10(10AA)
- Pension u/s 10(10A)
- Gratuity u/s 10(10)
- Voluntary Retirement Scheme u/s 10(10C)
- Perquisites
- Other Allowances
- Set off of Loss
- Others
The details are to be submitted as per the table mentioned below:
A5- Income/Gain/Loss:
This section includes the self-computation of salary income chargeable to tax A5=(A1-(A2+A3+A4)). If your income computation exceeds the minimum of 2.5 lakh then you should file your ITR.
FAQs
Yes, it is advisable to log in to the compliance portal. If a taxpayer doesn’t log in he/she will not be able to respond to the issues raised.
Upon examining the online response submitted by the taxpayer, ITD can raise an additional query request to seek further information/clarification from the taxpayer. Therefore, the taxpayer needs to respond to the additional query request as well.
If there are any e-Verification issues it will be pushed to the compliance portal for e-verification, Email and SMS will be sent to the taxpayer informing about the issue raised. Hence, taxpayers then need to respond to those issues raised.