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I am filing ITR1 and filling the same salary mentioned in Form16(Income chargeable under the head Salaries(3-5)). But on submitting, I am getting error the amount of salary disclosed in Income details/Part BTI is less than 90% of Salary reported in Schedule TDS1

When we fill salary from the head Salary(#6 of form-16 which came after deduction of Sec 10) and the software is taking reference of the Salary as TDS1 which is ultimately creating the difference. Can we modify Salary Part in TDS1 accordingly after deducting Sec 10 amount as it seems like the root cause of the warning message.

In last week we have got several such messages. We were confused as to why people are getting this message. We tried various combinations in excel but could not reproduce it. Finally we restored to asking our readers to mail us the information to our email id. And one of our reader was kind enough to share. We then realised that Income mentioned in Form 26AS is not the income under the head salaries (Pt 6 in Form 16). Now question is why do we get the warning, how to fix the warning, do we change the income details and fix the warning and continue.

Short Ans:
It is just a warning you can  submit your ITR. This is because your employer reported your gross salary in the TDS section which is higher than what you have filled in the Income from Salaries  due to the bug that’s there in the sheet. To fix this error, just modify the TDS sheet column 4 and change the amount to what is there in the Income chargeable under the head salaries in Form 16(pt 6) .

Our reader Anubhav has a suggestion which also makes sense. Thanks Anubhav.

As per my understanding its not just a warning as its not allowing you to submit ITR. So this need to be rectify first before submission. Here is the way:

  • Chargeble Income should be filled in B1 from Entry#6 of form-16 (INCOME CHARGEABLE UNDER THE HEAD “SALARIES” (3-5))
  • Taxable Income should be filled in TDS1 from Entry#11 of form-16 (Total Income (8-10))

Naveen left a comment on our site ,

Finally, I have successfully submitted by closing (yes.. closing by ‘X’) the message . Do not hit ‘OK’ button on message box which turns in to error with expired session and make you to re enter all the information again.

Income picked in Prefill from Form 26AS

When you use the prefill option then income picked up, Total Amount Credited and Total tax deducted , from Form 26AS as shown in image below. So using prefill option 692460 will be picked up as your income from Salary and Rs 55091 as TDS deducted. As we mentioned in our article What to Verify in Form 26AS?  PART A – Details of Tax Deducted at Source shows the TDS deducted from your salary / pension income and also TDS deducted by banks on your interest income. TDS deducted by each source is shown as a separate table. Clicking on + before the Name of deductor will show all the entries

Tax deducted and TDS in Form 26AS

Tax deducted and TDS in Form 26AS

  • Entries are in reverse chronological order that means entry with later date will appear first. So if you have entry for date 31-Jul-2014 31-Aug-2014, 30-Sep-2014 then they will appear as 30-Sep-2014 31-Aug-2014 31-Jul-2014. 
  • Details of deductor match your Form 16,Form 16A.
  • All entries for a deductor match the entries in your Form 16/16A. Check each entry for Section Under Which Deduction is made (192 for Salary, 193 for interest on Fixed Deposit from bank) , Date at which Transaction is made, Status of Booking.
  • Status of booking is F or FINAL which shows that payment details of TDS / TCS deposited in bank by deductors have matched with the payment details mentioned in the TDS / TCS statement filed by the deductors.
  • If Tax deducted by an employer is not reflecting in Form 26AS then employer should be approached to ensure filing of TDS statement with correct PAN.

Income reported in Form 16 Part B

As discussed in article How To Fill Salary Details in ITR2, ITR1  it is recommended to fill Salary as mentioned in Pt 6 Income under the Head Salary, shown in image below. This salary is arrived from Gross Salary(Pt 1 in Form 16) where employers  deduct allowance exempt under Section 10 such as HRA, Transport allowance and deductions usually Entertainment allowance and Tax on employment or Professional tax.

Form 16

Form 16

Now let’s look at the income and TDS submitted to government which is reported in Form 26AS and given to us as Part A of Form 16.

TDS in Form 16 part A

TDS in Form 16 part A

Please make sure that they match the details in Form 26AS as shown in image below

Match Form 16 TDS with that of Form 26AS

Match Form 16 TDS with that of Form 26AS

 

The amount of salary disclosed in Income details/Part BTI is less than 90% of Salary reported in Schedule TDS1

If you prefill from Form 26AS  then if the salary you entered using pt 6 in Form 16 is less than 90% of salary reported in TDS1 which gets prefilled then you get the error message. For example if your salary from Form 16 is 678688 but Gross Salary total (pt 1 (d) in Form 16) is 764320 then as 6,78,688/7,64,320 is 88.79%  you get the message that The amount of salary disclosed in Income details/Part BTI is less than 90% of Salary reported in Schedule TDS1

Tax details Prefilled from Form 26AS

Tax details Prefilled from Form 26AS

In the Schedule TDS1 you can change the Income under the Salary(3) . If you change it to salary in Income details you don’t get the message.

In calculation the income that it entered as Income from Salary is taken into account rounded off . For example 6,78,688 is rounded to 6,78,690. We have not included any deductions here.

Tax calculation is based on Income under head Salaries

Tax calculation is based on Income under head Salaries

Validation rules and Warning

Many companies are making Income tax filing software.There are a lot of errors and poor data quality in the software due to which returns are either rejected or wrongly generated.  Along with Excel,Java utility Income tax department also releases the rules,called Validation rules, that one needs to ensure in writing software for Income tax e filing.  Below is the communication regarding the Validation rules

The Income Tax Department has provided free return preparation software in the downloads page as well as facility for online ITR submission for ITR 1 & ITR 4S which are fully compliant with data quality requirements. However, there are commercially available software or websites that offer return preparation facilities as well. In order to improve the data quality received through in ITRs prepared through such commercially available software, various types of validation rules are being deployed in the e-Filing portal so that the data which is being uploaded can be validated to a large extent. Taxpayers are advised to review the same to ensure that the software that is used is compliant with these requirements to avoid rejection of return due to poor data quality or mistakes in the return. Software providers are strictly advised to adhere to these rules to avoid inconvenience to the taxpayers who may use their software

If you look at the Validation rules for ITR for example ITR 1 – Validation Rules for AY 2015-16 you will see the error/warning The amount of salary disclosed in Income details/Part BTI is less than 90% of Salary reported in Schedule TDS1  is in Category C.

ITR Validation Category C

ITR Validation Category C

And various categories are given below

ITR Validation Categories

ITR Validation Categories

Question is: why the salary in Form 16, Income chargeable under the Head salaries (3-5) does not match in Total Amount Credited in Form 26AS? For many of the readers and for us, it does. Is the workaround for that , editing the Income details in TDS1 section good enough? Or should employer re-file proper TDS details?  

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We are trying to find more information. If you have faced similar error or have some feedback or input, please do share. If you can email the name of your company to bemoneyaware@gmail, we would appreciate it. We are thinking of collating information and informing the companies that there might have to relook at the income files in Form 26AS. Your name would not be shared.  Should we do it?

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