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Consider these Incomes while filing your Tax Return

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THE due date for filing personal income-tax returns for the financial year 2012-13 is July 31.
We generally report our salary income, house property income and so on but tend to overlook some income sources that are required to be reported in the tax return. Here are some such incomes.


Interest from savings bank account: Interest from savings bank account is taxable and is required to be reported in the tax return. Interest up to Rs 10,000 from a savings bank account is allowed as a deduction under section 80TTA of the Income-tax Act, 1961 (IT Act), and the balance is liable to be taxed.


Interest from fixed de posit: Interest from fixed deposit is liable to be taxed. A person has the liberty to choose whether he wants to offer the interest on accrual basis every year or wants to offer on a cash basis (that is, one time on maturity). However, it's important that the interest is offered to tax.


Interest accrued on National Savings Certificates:

 

Interest earned on NSC gets reinvested in the scheme and becomes eligible for a deduction.


The deduction for the reinvested interest is available for the first five years.

However, we must not forget that such interest income is first taxable and needs to be included in the total income.


Cash gifts:

If you have received any cash gift during the year exceeding Rs 50,000 then the entire amount is taxable and should be reported under the head `income from other sources'.
However, cash gifts received from specified relatives, a local authority or on the occasion of marriage or under a will, etc, are not considered taxable.


Deemed to be let-out house property: If you have two or more properties and none of them is let out, then caution needs to be exercised while reporting this in your tax return.


Under the Act, if you own more than one residential property for self-occupation then you can claim one of them as self-occupied and the other will be considered as `deemed to be let-out'. In the case of property considered deemed to be let out, a notional rent of the property will be tax able as house property income.

Clubbing of income:

There are certain categories of income that arise in another person's name but are considered taxable in your hands under the Act. These in clude income arising to your spouse or to your son's spouse from any gift or transfer of asset made by you.

Similarly, income earned by a minor child gets clubbed with that of the parent with the higher income. Provisions regarding clubbing of income are governed by section 61 to 64 of the Act and wherever applicable, adequate disclosures should be made in the tax return.


Capital losses:

If you had incurred capital losses, then you should disclose the same in your tax returns. It will give you the right to carry forward and adjust the same with gains in future years, subject to certain conditions.


Exempt income:

Apart from the above incomes, certain incomes such as long-term capital gains on listed securities, dividends from mutual funds, interest earned on investment in public provident funds are exempt from tax. Although you do not have to pay taxes on such income, tax returns have a specific column to report such income.

Keeping track of the above incomes, which tend to be overlooked while filing returns, will ensure that the reporting requirements under the tax laws are met and any future litigation avoided.

Happy Investing!!

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