Tax filing has always been a daunting task for many. With the e-filing system taking on, this has eased to some extent. However, even now, there are a lot of queries that users face while filing their taxes online or offline. Out of those many queries, one important one would be to know which incomes need to declared at the time of tax filing. We have put together 5 such incomes which most of the tax filers miss.
(Also see: Eight important tax changes in 2014)
1) Rental Income
We Indians are fond of owning homes. It is a matter of pride and emotion to us. With loans spreading their reach, owing a house has become just that much easy. Most of us now own at least one house. There are a lot of us who have two houses. One of them would be declared as self occupied during tax filing. However, the other would most probably be rented.
Not many of us who receive rental income declare it to the ITR department. IT act states that rental income must be declared under Income from House Property category. Any house loan would also get exemption u/s 24. For loans on rented houses, there is no upper limit on the deduction allowed.
(Also see: Six lesser known deductions)
2) EPF withdrawal
EPF was and still is a part of lives of all employees. EPF also allows partial withdrawals subject to certain conditions. You could withdraw from EPF in case you are out of job for 2 months or more. Withdrawals done before 5 years of continuous service will be taxed as per the tax slab. If done after 5 years, tax will be nil. In either case, you need to declare the EPF withdrawal amount under the exempt income category.
3) Bank deposits
Apart from a savings bank account, we invest our hard earned money in fixed deposit and recurring deposit schemes offered by banks. Income earned as interest from these is not tax free. There is a tax exemption of Rs.10,000 on saving bank account interest though. Hence, you need to declare the interest received from all the deposits held with banks.
4) Part time income
Many a time, people opt for freelancing or part time income by working for professionals or companies. There are also people who work part time as insurance agents and earn commissions on the policies sold. Such income has to be declared at the time of filing your taxes. It is part of the income from business/profession category.
5) Income from share trading
Be it for thrill or to make money out of it, everyone loves to trade. This is the right approach if you want to participate in a country’s growth story. However, income from stocks or equity mutual funds is not fully tax free. If you hold equities for less than 1 year, you would have to pay flat tax @ 15%. Equities held for 1 year or more are tax free. Whether you sell before an year or after an year, you need to declare the profit earned in the tax filing form.