Salaried people generally show income presuming that interest on savings account is fully exempt as TDS has already been deducted on the bank fixed deposits. This is incorrect. Likewise, several taxable income are omitted due to oversight or ignorance. While filing your ITR, remember to include these items.
Capital gains from switched MFs
Switching from one scheme to another of the same mutual fund is not reflected in a bank as it is not routed through it. Any profit or loss made on such switching may thus get unreported. This switch may also be due to periodic investments or redemptions in liquid funds. The profit/loss on switching of units may be short-term or long-term. Discuss all such switch-overs with your consultant for correct treatment of loss or profit on such switch.
Where you are occupying more than one house for yourself, you are required to treat any one such house as self occupied. The others are then deemed to have been let out and you have to offer notional rent for such house for tax. Please note notional rent is not the same as nominal rent. Such a situation may also arise in cases where you have a vacant house property in your native place in addition to the property used as residence at your work place.
Savings account and fixed deposits interest:
Though interest on savings account is exempt upto Rs 10,000, you are supposed to include it in your income and then claim deduction u/s 80 TTA even if the amount is less than 10,000. Similarly, FD interest on which TDS is done also has to be included in the income as the TDS rate and the tax rate applicable may be different. Though the tax is deducted @ 10 per cent but the rate applicable to you may be 5 per cent, 20 per cent or 30 per cent. It is your liability to discharge the differential tax liability or even you can claim refund.
You may omit to show the interest on renewed FDs as it does not get reflected in bank account, which is not correct. Similarly, accrued income on NSC purchased in the earlier years and accrued interest on fixed deposits of longer tenure also need to be included.
Income of minor child:
The income/interest earned by the minor on his investments is required to be included in the income of the parent with higher income over and above Rs 1500 per child. The provisions for clubbing of income are not applicable in case the income is earned by the minor due to his efforts or his skills.
The author is a CA, CS and CFPCM