Apparently it's a problem with how the data is filled under section 17(1) under Schedule Salary, and you have to fix it.
It has been a long follow-up, with the tax department and finally they gave the solution : Please download the json from online and file the return using offline utility after importing this json and kindly check the break up of HRA is entered under section 17(1) under Schedule Salary to resolve this issue. You can see the same in the attached screen shot. But wait, isn't that like admitting that its a fault in their system ? Why would I need to download the json from one source and upload in another ? But let's try that for a moment. So I downloaded the json and updated it and uploaded on the desktop utility.
Went inside the Schedule Salary, and checked under section 10, the exemption for house rent was still showing up as zero.
So I figured out what I did was not right. Searched the json that was exported from online tool and there was no section 17(1) , so searching by 17(1) was definitely not working. Then I assumed, it was only shown in UI, so navigated to the Schedules Salary and tried to find out a clue to do what they asked for : kindly check the break up of HRA is entered under section 17(1) under Schedule Salary.
So the Salary is as per Form-16 / AIS, but then this had only the Basic Salary. There is an Edit button (on the top) and click on that and then click on Add Another and then add a component for HRA as shown above. But wait, the HRA amount is already been part of your Basic salary. So what you have to do is to calculate the Basic by deducting the amount of HRA and put that in Basic Salary and then put the HRA in the newly added component. The Form-16 already has the data and deducts the HRA from the basic salary to calculate tax. So ideally, the data should have been imported that way because its pretty standard process among all employers. And even if it has not been, it should allow me to enter the amount directly under the exemptions and consider that because that is how its in the Form-16. But behind the screen its looking out for the presence of the component under 17(1) Schedule Salary. SO after I entered in 17(1) and saving, the validation error does not come and I can see its considering that amount.
So finally they probably understood the problem after continuous follow up and figured out why the validation error was popping up ( may be did some code analysis). I did not give up and raised three grievances and patiently waited to understand the root cause and solution.
Now that the problem is solved, I have to go through each schedule in the offline utility and confirm before filling the return. So I thought, I should try in online mode because everything is already confirmed there.
And the changes did work well, so their point of uploading and doing it offline was not necessary at all. It's just a bug that exists in both and the solution works at both the places. However, the story did not end there. For every claim under exemptions, they need an entry in 17(1). And surprisingly it fails at the last step, which makes you go back and add them. They tell you to click on the link, but that does not work. So you can navigate back to Schedules , its auto saved, so no worries there.
So add every component under 17(1) and deduct the same amount from Basic Salary to ensure the final figure matches with your Form-16. There is no reason, why they want us to do all these manual work, where in they could have done it because the Form-16 clearly have them, so the AIS (Annual Information Statement) should have them as well. But since it blocks you to submit your return , you will have to figure out and make the change.
Once you come to a stage where Validation is successful, you can proceed for verification.
Select e-Verify Now as you can instantly verify, if your Mobile number is registered with Aadhar, which is most likely true for most of us.
Please note, you cannot modify after you submit, but don't get scared, you can fill a revised return.
This completes a big task of submitting the return. As the due date is approaching, its better to do it now, as the site will definitely go through slowness because of spike in the no of users. You may also refer my old post apart from this post, to have all the information.
And let me know, if you need any help, I will try my best to fill your return. And by the way, I have chosen the new tax regime from this year, so no more headache of filling all these exemptions.
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