Personal tax: Sources of income you must declare in your returns
July, 09th 2013
The due date for filing personal tax returns for FY13 is July 31. Many of us are aware that salary, rental income, etc., are taxable. However, we tend to overlook incomes like interest, gifts, etc., which need to be declared.Here is a list of some such incomes. Interest from fixed deposit
Interest from fixed deposit is liable to tax under the Income Tax Act, 1961. Some people believe that interest from fixed deposit is not taxable. This is not true. Banks will deduct tax at 10% on interest above R10,000 and the balance tax needs to be deposited by the assessee. A person has the liberty to choose whether he wants to offer the interest on accrual or cash basis.
Interest from savings bank account Interest from savings bank account is taxable. Interest up to R10,000 is allowed as a deduction under Section 80TTA of the IT Act and the balance is liable to tax. Interest accrued on NSC
Interest earned on NSC gets reinvested in the scheme and becomes eligible for a deduction. The deduction for reinvested interest is available for first five years. However, such interest income is first taxable and needs to be included in the total income. Cash gifts
If you have received any cash gifts during the year exceeding R50,000, the entire amount is taxable under the head ‘income from other sources’. However, cash gifts received from specified relatives, a local authority or on occasion of marriage or under a will, etc., are not considered taxable.