Personal tax: Sources of income you must declare in your returns

The due date for filing personal tax returns for FY13 is July 31.

The due date for filing personal tax returns for FY13 is July 31. Many of us are aware that salary,rental income,etc.,are taxable. However,we tend to overlook incomes like interest,gifts,etc.,which need to be declared.Here is a list of some such incomes.

Interest from fixed deposit

Interest from fixed deposit is liable to tax under the Income Tax Act,1961. Some people believe that interest from fixed deposit is not taxable. This is not true. Banks will deduct tax at 10 on interest above R10,000 and the balance tax needs to be deposited by the assessee. A person has the liberty to choose whether he wants to offer the interest on accrual or cash basis.

Interest from savings bank account

Interest from savings bank account is taxable. Interest up to R10,000 is allowed as a deduction under Section 80TTA of the IT Act and the balance is liable to tax.

Interest accrued on NSC

Interest earned on NSC gets reinvested in the scheme and becomes eligible for a deduction. The deduction for reinvested interest is available for first five years. However,such interest income is first taxable and needs to be included in the total income.

Cash gifts

If you have received any cash gifts during the year exceeding R50,000,the entire amount is taxable under the head income from other sources. However,cash gifts received from specified relatives,a local authority or on 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 returns. Under the Act,if you own more than one residential property for self-occupation,you can claim one of them as self-occupied and the other will be considered as deemed to be let-out. In case of property considered deemed to be letout,a notional rent of the property will be taxable as house property income.

Exempt income

Apart from the above incomes,certain incomes like dividend income,agricultural income and exempt income of minor child are classified as exempt income. Although you dont have to pay tax on such income,tax returns have a specific schedule for reporting such income.

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If you have any of the above incomes,you can start collecting details so that you can include them in your tax returns. This will avoid hassles of filing a revised return later.

The author is a director with KPMG. The views expressed are personal