While filing income tax returns, it is important to disclose all incomes from various sources. However, in a rush to file our returns within the stipulated deadline, we tend to miss out on disclosing certain crucial incomes. This issue arises due to confusion about incomes that come under the ambit of tax deducted at source (TDS) and those which don’t. To ensure you do not miss out on disclosing any of your incomes, it is important to you make a list of such items before filing your ITR.
Here are those incomes that should not be missed:
Complete coverage of Taxes and Investments
Savings Bank Account Interest
The funds you park in your Savings Bank Accounts earn interest ranging from 3% to 7% p.a. rate. Section 80 (TTA) of the I-T Act provides deduction for interest earned up to Rs. 10,000. This needs to be reported while filing the returns even though there is no tax deduction on this income at source. You have to report this income under the head; ‘Income from other sources’, and claim deduction under Section 80 (TTA).
NSC Investment Interest
You earn interest by investing in National Savings Certificates (NSCs) on a yearly basis, which is paid on maturity. Under Section 80C of the I-T Act, you can claim deduction on the interest earned yearly and on the amount you spent while investing in NSC for the first time for amount up to Rs. 1.5 lakh. The interest earned is reinvested and thus it enjoys the deduction under Sections 80C as per the total limit. Since the interest earned in the last year is not reinvested, it doesn’t qualify for deduction under Section 80 (C). Therefore, you have to report this in the taxable income while filing ITR.
Fixed Deposits (FDs) Interest
If your Fixed Deposit investment earns an interest above Rs. 10,000 in a financial year, it is subject to TDS deduction. While calculating the taxable income, this interest income needs to be included despite TDS being deducted. It is easy to ascertain the TDS amount by using the Form 16 A received from the bank or by downloading the Form 26 AS. People tend to miss out this especially when the FD is kept as a security deposit for a bank locker and the interest is auto debited for locker rent.
PPF Investment Interest
Although the interest earned through investing in PPF is exempted from tax, this income needs to be reported while filing ITR under the exempt income head. This helps you in establishing your total income in future.
Delayed TDS Refund Interest
If your tax refund payment gets delayed by the I-T Department, you are entitled to earn interest on the refund amount as per the prescribed rate. This interest earned is considered as an income in a financial year and needs to be reported.
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Besides, the above mentioned interest incomes, interests earned on post office RDs and FDs should be reported. You should also report interest earned on deposits made with the electricity department, investment in a bond issue etc. While filing the ITR, exercise due diligence in and report these incomes under appropriate heads.
