Where to Show Pension Income in ITR 1?

Wondering where to show pension amount in ITR 1

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In India, pension income is treated as salary income and must be reported accordingly in the Income Tax Return (ITR) 1 form. 

ITR 1, also known as Sahaj, is applicable for individuals who are residents and have a total income of up to Rs. 50 lakh, which includes salary, one house property, other sources (like interest), and agricultural income up to Rs. 5,000.

Where to Mention Pension Income in ITR 1?

• Download and Access ITR 1 Form: You can download the form from the

  Income Tax Department’s e-filing portal

  or access it online.

• Navigate to 'Income Details' Section: In the online form, this section is usually found under Part B of the ITR 1.

• Report Pension Income under ‘Salary’: In the ‘Income Details’ section, you will find a field labeled ‘Salary/Pension’. Enter the total pension amount received during the financial year in this field.

• Details of Exempt Allowances and Deductions: If you receive any exempt allowances or claim deductions, such as a standard deduction, professional tax, etc., these should be entered in the appropriate sections within the form.

Example of Reporting Pension Income:

Suppose you receive a monthly pension of Rs. 30,000. Your annual pension income would be:

Rs. 30,000 x 12 = Rs. 3,60,000

In the ITR 1 form:

• Navigate to the ‘Income Details’ section.

• Locate the ‘Salary/Pension’ field.

• Enter Rs. 3,60,000 in the ‘Salary/Pension’ field.

Additional Points to Consider

• Standard Deduction: From FY 2018-19, a standard deduction of Rs. 50,000 is available to salaried individuals and pensioners. Ensure you claim this deduction, which will be auto-populated in the online form or needs to be entered manually in the downloadable form.

• Form 16: If you receive Form 16 from your former employer or bank managing the pension, use the details provided to ensure accuracy.

• Other Income Sources: Report any additional income, such as interest from savings accounts or fixed deposits, in the respective sections.

Reporting pension income in ITR 1 is straightforward. It should be included in the ‘Salary/Pension’ field under the ‘Income Details’ section. Ensure you claim all relevant deductions and exemptions to reduce your taxable income. 

Accurate reporting ensures compliance and prevents future discrepancies with the Income Tax Department. This is all about where to put pension income in ITR 1

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My father retired just a few months back and he recently had to file his ITR for which he asked me where to show pension income in ITR 1. I have a friend who is a CA, so I turned to her for help and she told me that accurate reporting is necessary for the income tax return (ITR) form that the government released for the fiscal year (FY) 2018–2019. For instance, descriptions of the various allowances and perquisites received throughout the FY must be declared explicitly for the FY 2018–2019, in contrast to prior years where just cumulative numbers under reimbursements and perquisites were to be provided. I am going to tell you everything else that she told me about showing pension income in ITR ahead.

Where and how to show pension in ITR 1?

Despite the stringent reporting requirements, retirees should keep the following in mind while submitting their tax returns:

1. Pension payments are classified as salary or other sources of income.

   Employees who get pensions from their former employers are considered to have earned salary income, and as such, the pension will be reported in the ITR underneath the title Income from Salaries. However, a pension received by a relative of a deceased employee is subject to taxation as "Income from Other sources."

• Taxability of salary income depends on whether the pension was commuted or not. An uncommuted pension refers to the regular payments the person receives, whereas a commuted pension denotes a lump sum amount received ahead rather than the regular installments.

• Regarding the taxability of income derived from other sources: A monthly pension received by a family member of a dead employee is regarded as "Income from Other sources," If there is any remaining pension, it is taxable as other sources of income up to a maximum of Rs. 15,000 per year.

1. Which ITR is to be used in filing tax returns? 

For individuals who meet the requirements to be considered ordinary residents of India, with a net taxable income of Rs. 50 lakh or less, receive income from salary, one home, or other sources, and whose income from the agricultural activity does not exceed Rs. 5,000, ITR 1 must be used. Additionally, ITR1 cannot be used by anyone who owns unlisted shares or serves as a director of a firm.

The ITR forms that will be utilized for submitting the tax return will be used for reporting pension income, and these forms will in turn be calculated depending on the presence and amount of any other types of earnings the employee receives. Pensioners frequently use ITRs 1 and 2.

1. How can we declare pension income as a tax return? 

In the case of ITR 2, the employee must record the name, address, and tax rebate and collections account number (TAN) of the employer, LIC, or any other fund when the individual gets pension contributions from the account that the employer makes contributions.

Family members who get pensions must reveal them under "Any other income" in the schedule of other resources in ITR 2's schedule of other sources. The person must select "Family pension" from the drop-down menu under "Other Sources" for ITR 1.

I believe now you are aware of where to show pension income in ITR 1.