Most of the individuals do not disclose certain incomes as those are not noticed by them while filing there IT return. As per the provisions of IT act, all incomes are taxable if it’s not exempted specifically under the act.
When you get your form 16 from your employer, it will contain only your salary for the financial year and not the other incomes that you are receiving apart from salary. However there are other heads like ‘Other sources’, ‘house property’ under which other incomes may be taxed. If you have any it then that has to be reported while filing your ITR.
Form 16 received at the year end from employer only specifies those income that you have disclosed to them. If you have interest from your saving bank account and it has not been disclosed to your employer, then your have to mention it while filing your ITR and tax has to be paid on such additional income (IT deduction of Rs. 10, 000 can be claimed under section 80TTA for the interest amount you received from your saving bank account).
Followings are the list of incomes which you can miss while filing your ITR;
Interest earned from your saving bank account
If the interest amount received by you during a financial year is in excess of Rs. 10, 000 then it will be charged to tax under the head other sources. You can disclose it to your employer to consider for IT deduction while deducting TDS from your salary. If you have not disclosed it to your employer then do not forget to mention in while filing your IT return.
Interest earned on your bank fixed deposit
Interest earned by you from your fixed deposit amount will be treated as taxable under the head “other sources” and no deduction is available from it. Most of the banks deduct TDS from such interest amount but the this deducted may not be the actual amount that you are supposed to pay to IT department. So you need to add it to your salary and recalculate your tax liability to get actual tax payable. For example if you disclosed your PAN to your bank then bank will be deducting 10% on your interest amount as income tax but your salary may be charged at a higher rate of 20% or 30% based on the slab rates that is applicable to you. At the end of the year when you consider the interest amount for tax purpose your liability will be increased according to your slab rate of 20% or 30%.
If you are not liable to tax then form 15H or Form 15G can be submitted to your bank for not deducting TDS from your interest amount.
Interest earned from your recurring deposit
Banks do not deduct TDS from the interest amount of such types of deposit but the it is taxable in your hand and has to be disclosed while filling your IT return.
Interest earned from your NSC
Interest from your NSC is taxable on accrual basis i.e. it will be taxable if you have not received the interest amount so far but has been credited to your account. It needs to be disclosed in your IT return when accrued to your account.
Gift received during the financial year
Any gift received in cash or by cheques or by demand draft or any immovable property or movable property valuing more than Rs. 50, 000 during the year will be taxable and this has to be treated as an income under the head “other sources”. For more details on gift tax please read this article
If you have a Public Provident Fund account and during the year interest has been charged to your account then such interest amount will not be charged to tax as it’s specifically exempted under IT act. Like we have mentioned above, there are some more income like house property, capital gain or loss which need to be considered while filing your ITR. Disclosing correct income in your IT return is the responsibility of taxpayer. If any income tax has not been paid due to such non discloser and IT department has access to those sources then you may get a demand notice for non payment of tax.
