It’s the tax season. The last date to file ITR is July 31st 2019. You would file ITR taking into consideration, income from salary. What about income from other sources?
You definitely file Income Tax Returns considering income from salary. You must also account for income from other sources and then select the right ITR form.
What happens if you don’t account for income from other sources? Well, the Income Tax Department can catch you for tax evasion. You get an income tax notice, asking about the source of income.
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Let’s understand how the IT Department categorizes different sources of income.
See Also: How To E-File ITR Form -1 In 2 Minutes?
Income from other sources is chargeable to tax, under the Income Tax Act, 1961. The income which is not covered under the other 4 heads of income is the income from other sources.
What is Recurring Income? This income is received regularly and at equal intervals. This is interest income from SB accounts, post office savings, fixed deposits and recurring deposits.
What is Non-Recurring Income? This is income received just once. This could be income from horse racing, gambling or a lottery.
Dividends are taxed under income from other sources. Income from betting, crossword puzzles are taxed at 30% under income from other sources. Income from compensation and enhanced compensation is taxed under this category, but 50% is eligible for a deduction.
Gifts received by you (individual) and HUFs are taxed as income from other sources. Income from your PPF and EPF after service of at least 5 consecutive years, and is exempt from taxes, comes under income from other sources.
See Also: Documents Needed When Filing ITR
Interest income from savings bank account is not taxed. You enjoy a deduction under Section 80 TTA on interest from SB accounts up to Rs 10,000 a year. However, even if you have not crossed this threshold, do show SB interest income while filing income tax returns. Disclose exempt interest income from SB account in ITR-1.
Income earned from dividends is exempt under Section 10(35), up to Rs 10 Lakhs in a Financial Year. Do report dividend income when filing ITR, even if exempt. You can disclose exempt dividend income in ITR-1 Part D under “exempt income” head.
Let’s say you got a tax refund with interest on it during the relevant financial year. This tax refund is not taxed. But, the interest on this refund is included as taxable income. You can get details on tax refund from Form 26AS.
If you get pension amount being a dependent of a Government employee, it’s called family pension. Include family pension when filing ITR.
Lots of people work in cities and earn agricultural income from their native villages. If this agricultural income is less than Rs 5,000, you can file ITR-1. But, if agricultural income exceeds Rs 5,000, report such income in ITR-2.
The IT department has made changes in ITR Forms for this Financial Year. You must give the detailed break-up of income when filing ITR.
Go to the drop down menu and choose the type of income. Take a look at 5 options from drop down menu:
How to Find Interest From Savings Account? Simple, check SB account interest entries in passbook. You can visit bank and post office branch to collect your interest certificates
How to Find Interest From Deposits? Visit the bank/post office branch and collect interest certificates.
How to Find Interest From Income Tax Refund? Check interest amount received from Form 26AS. You get to see refund and interest separately.
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