Filing Income
Tax Return can be a tough task and there are times when taxpayers
forget to mention certain details, among these details are your income from
other sources. There are incomes that you may forget while e-filing Income Tax Return,
but if Income Tax Department traces the income that you have not disclosed then
you can be penalised for the same.
Things can go
out of hand, if the undisclosed income is substantial and tax has not been paid
on it. The taxpayer will receive a notice and will have to pay a heavy penalty.
Many taxpayers are under impression that, if TDS has been deducted on their
fixed deposits, they don’t have to pay more tax. TDS is just a part of your tax
liability not all of it. It is only 10% of the interest income. If the taxpayer
falls in a higher tax slab, he must pay additional tax.
Income from Saving Bank Account
There are some cases
where a taxpayer may be confused about his/her interest income from savings
bank account, this confusion may arise due to certain relief provided to the
taxpayer by the Government of India. As per 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 untouched
in your savings bank account for the relevant financial year. In other words,
most small taxpayers will not hit that threshold of exempt income. If you don’t
hit the threshold also, in that case also you will have to report this income.
As we know
interest income from fixed deposits is fully taxable and the interest income
from savings bank account is partially taxable, the taxpayer will have to
declare the tax-free income also. In ITR 1 Form there is a different section to
mention this exempt income.
So, while doing itr
filing for the financial year 2018-19, you must remember the above-mentioned
details.
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