sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Latest Expert Exchange
News Headlines »
 Companies (Significant Beneficial Owners) Amendment Rules, 2019
  Tax saving guide for FY 2018-19
 4 lesser known ways to save tax. Filing income tax returns?
 You do not have to pay TDS on FDs under this amount Income tax returns (ITR)
 Income-tax (15th Amendment) Rules, 2019
 How To Calculate Income Tax For Assessment Year 2020-21
 Financial Interim Budget 2019-20
 5 personal tax changes expected in Budget 2019
 Check how much tax would be levied on your income Income Tax returns Invested in debt schemes
 3 taxes no one should have to pay
  Tax saving guide for FY 2018-19

Dont ignore these incomes while filing your tax return
July, 09th 2018

Nobody will raise an eyebrow if you give incorrect information to a tax adviser. Many readers who write in for tax advice to ET Wealth don’t mention interest income in the form. But all hell could break loose if you make the same mistake in your income tax return. Interest income from bank deposits, bonds and most Post Office schemes is fully taxable. It has to be declared in the “Income From Other Sources” section in the income tax return.

However, tax filing portal Taxspanner found that almost 80% of taxpayers who filed their returns do not report any interest income. “Not declaring this income amounts to tax evasion and could fetch a notice from the tax department,” says Sudhir Kaushik, Co-founder and CFO,

Things become more serious if the undeclared income is substantial and tax has not been paid on it. The taxpayer could be slapped with a late payment penalty. Many taxpayers are under the misconception that if TDS has been deducted on their fixed deposits, they don’t have to pay more tax. “TDS is not the end of your tax liability,” says Kaushik. It is only 10% of the interest income. If the taxpayer falls in a higher tax slab, he must pay additional tax.

Savings bank interest
Some of the confusion here is due to the tax relief extended to savings bank interest. Under Section 80TTA, up to Rs 10,000 interest earned on the savings bank account is tax free. Only the interest exceeding Rs 10,000 is liable to tax. This is a very high threshold because at 4% interest, you will earn Rs 10,000 interest only if you let Rs 2.5 lakh idle in your savings bank account for a year. In other words, most small taxpayers will not hit that threshold of exempt income. Even so, this income too has to be reported.

While interest from bank deposits is fully taxable and savings bank interest partially taxable, even tax-free incomes have to be declared. “Amounts credited to your bank account on maturity of the PPF or as interest on tax-free bonds must be duly reported in the return,” says Archit Gupta, Founder and CEO, In ITR-1, there is a separate section for disclosing exempt income. In other forms, this must be reported under Schedule EI (Exempt Income).

Similarly, while dividends up to Rs 10 lakh are tax free under Section 10(34) and income from a life insurance policy is tax free under Section 10(10d), these incomes must be reported in the tax form. While most taxpayers ignore small sums of exempt income, experts say large amounts should be declared. “Disclosing this income in the return helps create a trail and gives the taxpayer ready explanation for investment or use of such money in future,” says Gupta.

This assumes greater importance because when you make high-value investments or purchases, the transaction is reported to the tax authorities. If you buy a car worth Rs 8-10 lakh or book a flat with a Rs 10-15 lakh downpayment or even invest a large amount in stocks or mutual funds, the car dealer, real estate developer and stocks broker is supposed to inform the tax department. You will find it easier to explain the source of funds if you declare them in the tax form. Taxpayers are also required to mention tax-free capital gains. “Tax filing is mandatory for those who do not have taxable income but have exempt LTCG of Rs 2.5 lakh or more,” says Gupta.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2019 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Publishing Management System PMS News Management System Publishing Management System Development Online News Management System for media company custom Publishing management system development Survey management system Market Res

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions