Have You Disclosed Other Source of Incomes?

The due date for filing personal income-tax returns for the financial year 2012-13 is 31^st 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:

1	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.
2	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.
3	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.
4	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.
5	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)
6	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
7	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
8	Dividend Income	Dividend income is tax free in the hands of the investor. However this should be declared while filing income tax returns

Credit Card- A Plastic Money

Credit Card is a plastic card that is issued by financial company to the holders to borrow instant funds at the point of sale. It denoted the good credit ranking of the person and also is a promise that the borrower will repay the money within due date. It has become a lifestyle asset for the third generation people. But it can become liability to you if you do not have control on your spending. Here are some advantages and disadvantages of credit card payment.

Advantage of Credit Card Payment: 

• People can purchase items even they do not have money. The can take instant fund and can shop the items. 

• People are not required to carry cash to do shopping. 

• You can take the loan and at the same time have a reputation of good credit history. 

• People can do shopping anywhere. It helps you buy products online. Wireless Credit Card helps you make the payment online. Electronic payment system is really good and convenient mode to shop items. 

• It gives you reward points that you can redeem and enjoy the benefit.

Disadvantages of Credit Card Payment: 

• You are required to pay some extra amount for the product in the form of tax. Different companies levy different tax amount on Credit Card Processing. 

• You are levied heavy tax than that of normal loan if you cross the due date of payment. It also damages your credit rating. 

• It allows you to take more debt than that you can handle. It sometime makes you uncontrolled and you can buy unnecessary items at high cost.

Some Hidden Charges:

Nowadays most of the banks not informing the customers about the fees change and there is no clear intimation. It will affect your expenses and have to handle this clearly.

1. Avoid late payment fees

It is always keep in mind that the due date for all your Credit Cards. If you are missing the due, it will end up paying the late payment fees. Also periodically check for the due date, if there is any change by the bank.

2. Annual Fees

It is another expenses happening in the every year. If you taken the card with the life time free, then there should not be any fees for using the credit card. You have the rights to ask the company and they are responsible to provide the explanation.

3. Interest Rates

Learn about the Interest Rates of credit cards. There is lot of trick in explaining the interest rates by the banks. They will not tell you the annual rate for the credit cards. Because, it is higher than the other form of loans like Personal Loans, etc. It is always good to avoid taking the huge amount from the credit cards.

These are the advantages and disadvantages of credit card payment. Having a credit card is not bad rather it is an asset for you if you utilize it properly. You should try to make use of credit card only when you need urgently. It is for emergency and not for fun and entertainment. Understand the value of money and make its proper use. You will then find it to be an angel in distress.

Most of the people have a question in their mind that who give the instant loan to make the payment and how is credit card payment settled? The answer is – through merchant account. Merchant Accounts are special bank accounts that deal with credit card payment and settlement. These accounts are agreement between the credit card companies and the retailers to settle the payment.