ITR Filing 2024: Experts say that the biggest mistake in filing income tax returns is declaring income from other sources. The reason for this is that many taxpayers do not know which income comes under it
ITR Filing 2024: Filing income tax return is a task that needs to be done with utmost care. You have to give information about income from every source in it. Since income is divided into five different heads, this task becomes a little difficult. The five heads of income include – salary, business and profession, capital gains, house property and other sources. It is important to tell about the income under each head.
Often taxpayers forget to disclose these incomes
Mumbai-based chartered accountant Suresh Surana said that taxpayers usually fail to disclose income from all sources. Taxpayers should disclose income from all sources including interest, dividend, royalty, rent, gambling income. Apart from this, it is also necessary for resident and ordinary resident taxpayers to disclose income from their foreign assets.
Penalty may be imposed for not giving complete information of income
Yeshu Sehgal, Head of Tax Market at AKM Global, said that often taxpayers forget to give information about income from other sources. Apart from this, they also do not give information about income from some other sources. These include interest income, rent income etc. Penalty can be imposed for not giving information about income from every source. The assessment process of taxpayers can also take a long time.
What is meant by income from other sources?
The income from other sources head includes all such income which does not fall under the other four major heads of income. The four major heads include salary, house property, business and profession and capital gains. The income from other sources head includes interest earned from bank savings accounts, fixed deposits, recurring deposits and bonds. Most taxpayers have savings accounts and FDs in banks. The interest money for these is directly credited to the bank account. People often forget to declare this income in their income tax returns.
It is also necessary to declare tax exempt income
Keep in mind that whether the income earned through interest is taxable or not, it is necessary to declare it in the return. Under Section 80TTA of the Income Tax Act, taxpayers below the age of 60 years are exempted from tax on income up to Rs 10,000 as interest from savings bank account. Senior citizens, i.e. persons above 60 years of age, are exempted from tax on income up to Rs 50,000 as interest from savings account and FD.
This income also comes under income from other sources
Apart from interest income, dividend income from shares and mutual funds, gift received from non-relatives worth more than Rs 50,000 in a financial year is also required to be given under income from other sources. Apart from this, income from lottery, crossword and game show comes under this head. Income from family pension to family members after the death of the pensioner also comes under the income from other sources head. Penalty is levied for not giving information about all the income in the ITR form and interest also has to be paid on the unpaid tax.
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