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Not Reporting These Incomes Could Attract Penalty of 200%

IndianMoney.com Research Team | Updated On Monday, August 12,2019, 01:06 PM

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Not Reporting These Incomes Could Attract Penalty of 200%

 

 

It’s the final countdown. August 31st, the last date to file ITR, is just weeks away. You and many other citizens are filing ITR yourself, believing it to be an easy task. While filing income tax returns is really easy; you definitely need the help of a financial advisor.

If you make a mistake when filing ITR, you end up paying a penalty of 200%. You can now file Income Tax Returns absolutely free through IndianMoney.com. You just need to click on the icon “FREE Income Tax Filing before 31st Aug”, and file your income taxes in just 5 minutes. If you are stuck while filing income tax returns, you would get a call offering help to complete the tax filing process.

Want to know more on Tax Planning? We at IndianMoney.com will make it easy for you. Just give us a missed call on 022 6181 6111 to explore our unique Free Advisory Service. IndianMoney.com is not a seller of any financial products. We only provide FREE financial advice/education to ensure that you are not misguided while buying any kind of financial products.

Not Reporting These Incomes Could Attract Penalty of 200%

While filing ITR, you may miss out reporting some income sources. You end up paying a hefty income tax penalty of 200%.

1. Interest on Bank FD and Savings Bank Account:

You are eligible for a tax deduction under Section 80TTA on interest earned on savings bank account up to Rs 10,000 a year. Even if the interest on SB account is less than Rs 10,000 a year, you must include this in the ITR as income from other sources. You then claim a deduction under Section 80TTA. If interest earned is more than Rs 10,000 a year; you pay tax on the excess amount.

Banks deduct TDS on interest income from FD when interest from one or all FDs with the bank is more than Rs 40,000 a year. It’s Rs 50,000 a year for senior citizens. Now, if the bank has deducted TDS on FD interest, does it mean you don’t declare this income? There may be a difference in tax rate at which TDS is deducted and tax rate which applies to your income. So, you definitely need to report FD interest as income from other sources, while filing ITR.

2. Income Earned on Investment of Minor Child:

The income earned up to Rs 1,500 in a year from a minor child (each minor child) is exempt from tax. Any amount above this; has to be clubbed with the income of the higher earning parent and is taxed as per his/her income tax bracket. Make sure you club this income if it’s above the exemption limit.

3. Capital Gains When Switching Mutual Fund Units:

You could switch mutual fund investments across mutual fund schemes for various reasons. Now, LTCG on equity funds attract LTCG tax of 10% if gains exceed Rs 1 Lakh in a year. You must report gains on such transfers or switches (This is switching between equity mutual fund schemes); while filing ITR as there could be some profit/loss in the transaction.

You could get a notice under Section 148 of the Income Tax Act if the assessing officer (AO); believes that income chargeable to income tax has escaped assessment. If the AO has materials to support this belief; you land up with an income tax notice under Section 148.

So, do not fail to report any income earned when filing ITR. You could land up with an income tax notice under Section 148 of the Income Tax Act. The IT department will charge a penalty of 200% on unreported income when filing ITR.

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IndianMoney.com Research Team

The research team at IndianMoney.com comprises of certified and experienced professionals who share the company's vision to make every Indian financially literate by equipping every Indian with right and unbiased advice. IndianMoney.com research team provides newsletters, articles, videos and FAQs on various financial products and concepts only to help you make wise financial decisions.

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