Saturday, June 29, 2013

Have You Disclosed Other Source of Incomes?

The due date for filing personal income-tax returns for the financial year 2012-13 is 31st July 2013.

There are a few more sources of income which one MUST disclose. The disclosure can be done either to our employer (so that they are taken care of in Form 16) or while filing our returns.

Some of the very important disclosures are:

Interest earned from Savings Bank Account
Interest earned from savings account is tax free up to Rs 10,000/-. Any interest earned above that is taxable and should be declared.

Interest earned from Fixed Deposits
Interest received from fixed deposits is taxable as per ones income tax slab.

Most of the times banks deduct 10% TDS when the interest accrued is more than Rs 10,000/- (unless one submits a Form 15 G/H). However, the actual tax liability will be more or less, depending upon the tax bracket one falls under after all incomes and deductions are claimed.

Interest earned from Recurring Deposits
Interest received from recurring deposits is taxable as per one’s income tax slab.

Banks do not cut any TDS on interest earned on recurring deposits and hence it becomes even more important to declare this source of income.

Interest earned on Postal deposits and National Savings Certificates (NSCs)

Interest earned on Postal deposits and National Savings Certificates (NSCs) is taxable and needs to be declared.
Cash Gifts
Cash gifts received for more than Rs 50,000/- should be declared as they are taxable (unless for specific occasions like marriage, will etc)

Capital Gains/Losses
Any Capital gains/losses made from trading equities, selling mutual funds, gold etc should be declared even though they may be non-taxable (e.g. for equities long term capital tax is NIL).

Similarly, any losses should be declared as these help in offsetting gains for subsequent years

Exempt Income
Exempt Income (e.g. Interest earned on PPF/EPF accounts) should be declared for auditing purposes only. This is a tax free income

Dividend Income
Dividend income is tax free in the hands of the investor. However this should be declared while filing income tax returns

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