As the deadline to file India Tax Return (ITR) approaches, individuals must accurately disclose all income and relevant information. While most people are aware of common income sources, such as salary, rent, and bank interest, there are lesser-known streams of income that often go unnoticed. Failing to disclose such income can lead to penalties and legal complications.
Gift From Non-Relatives: Uncover The Taxable Treasure
"Receiving a gift from a non-relative, where the value exceeds Rs 50,000, necessitates reporting it as taxable income in the ITR. Neglecting to do so can result in potential tax liabilities and consequences," says Akhil Chandna, Partner at Grant Thornton Bharat.
Prize Money or Lottery Winnings: Winning Comes With Tax Responsibilities
Whether you strike luck in online competitions, offline contests, or lottery draws, any prize money received must be reported under the "Income from Other Sources" (IOS) section in your ITR. Remember to include these winnings to ensure accurate tax compliance.
Interest Income: The Silent Earner That Must Be Heard
Often overlooked, the interest earned on savings bank accounts and fixed deposits should not be omitted from your tax return. Even if the income seems nominal, it is essential to report it, as every rupee counts toward accurate income disclosure.
Clubbing of Income: Unmasking The Hidden Taxable Investments
"Investments made in the name of your child or funds given to your spouse for investment purposes require the income generated from these investments to be included in your taxable income. Ignoring this aspect may unintentionally attract legal and financial consequences," adds Chandna.
Interest On Post Office Accounts: Demystifying The Tax Treatment
A common misconception is that interest earned on post office accounts is exempted from tax. However, the reality is that the tax treatment varies depending on the type of account. Be aware of the tax implications associated with different post office accounts, as detailed below:
Post Office Savings Account: Exempt up to Rs 3,500 (in an individual account) or Rs 7,000 (in a joint account) [Exemption under Section 10(15)(i) of the Income-tax Act, 1961].
Post Office Term Deposit: Not exempt; completely taxable.
Dividends: The Hidden Tax Bite In Share Ownership
Dividend income earned from shares is subject to taxation and should be reported under the "Income from Other Sources" section in the ITR. Be sure to include all dividend earnings to ensure accurate and compliant reporting.
Taxpayers must exercise caution and collect their financial data diligently, as even minor errors can lead to tax notices, penalties, and legal complications. By proactively addressing these lesser-known income sources, individuals can confidently navigate the tax landscape and ensure compliance with tax laws.
