ITR filing FY 2024-25: Don’t make the mistake of not reporting tax exempt incomes such as PPF, gratuity; here’s why

ITR filing FY 2024-25: PPF curiosity is tax free. So is the curiosity coming from tax free bonds. The maturity proceeds of life insurance coverage are additionally exempt from tax. But whereas the taxman permits you to pocket these tax free incomes, he calls for full disclosure. “While exempt income is not taxable, it is mandatory to disclose it in ITR under the “Exempt Income” schedule,” advises Nishant Khemani, Managing Partner of the Saturn Consulting Group.There are a number of sources of tax free revenue (see desk). But many taxpayers make the mistake of not mentioning these incomes of their return. Reporting your exempt revenue in your tax return isn’t nearly ticking a field — it’s about making certain that you just don’t face scrutiny later in life.When it involves filing your tax return, transparency is essential. The return should account for all monetary transactions throughout the 12 months. This contains incomes which might be tax free.This disclosure is obligatory in case your gross complete revenue exceeds the primary exemption restrict or you might be in any other case required to file an ITR. Though there isn’t a penalty for not reporting this revenue, taxpayers who embrace this revenue in the tax return will discover it simpler to clarify the supply of funds in future, particularly for high-value exempt receipts like maturity of PPF account or life insurance coverage coverage. “If a large amount (more than Rs 50 lakh) is deposited in a savings bank account in a year, the bank is obliged to report it to the tax authorities,” warns Umesh Jethani, Founder of Apki Return. Keep in thoughts that the Annual Information Statement might have already got information of exempt revenue (tax-free bond curiosity, life insurance coverage receipts, provident fund funds). If these are lacking out of your ITR, it might probably set off a discover for “information mismatch”. Though it should finally get resolved, there may be the risk of a delay in processing refunds if the return is flagged for verification.