The ongoing income tax return filing season has prompted crores of people to prepare their returns, with salary income often taking centre stage. But, taxpayers are expected to declare every taxable income stream earned during the financial year, rather than limiting disclosures to what is shown on their salary slips.
Income from multiple sources, including salaries, FD interest, freelance assignments and rental properties, must all be reflected in an individual's income tax return where applicable. Failure to disclose taxable earnings in full could lead to regulatory action, financial penalties or delays in receiving refunds.
Here's a look at some major sources of income you should report while filing your income tax return.
Salary Income
Salary income forms the backbone of most taxpayers' earnings and includes several components besides regular monthly wages. Basic salary, DA, HRA, LTA, bonuses, incentives, special allowances and taxable perquisites all fall under this head where applicable.
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Once the financial year concludes, employers provide Form 16, outlining salary paid, TDS deducted and deductions claimed. Before filing an ITR, however, it is advisable to reconcile the information with the Annual Information Statement (AIS), Form 26AS and individual salary statements to ensure there are no discrepancies.
Interest From Fixed Deposits
Fixed deposit interest forms part of taxable income and must be disclosed in the income tax return, irrespective of when the money is actually received. The deduction of TDS by the bank does not remove the obligation to report the income.
Instead, taxpayers should declare the full interest earned during the financial year under 'Income from Other Sources' and use the TDS deducted as a credit while computing their final tax liability. This applies to interest generated from bank fixed deposits, recurring deposits, corporate deposits and qualifying Post Office time deposits.
Freelance Income
Freelance and gig-based work has become an important source of additional income for many salaried individuals. Payments received for consultancy assignments, professional services, online tutoring, graphic design, software development, content creation, digital marketing or social media collaborations are all required to be reported while filing an ITR.
Such earnings are generally assessed under the head 'Profits and Gains of Business or Profession', with deductions for qualifying business expenses allowed under the Income-tax Act.
To conclude, the process of filing an ITR goes beyond declaring income received from employment. Earnings from fixed deposit interest, freelance assignments, rental properties and investment transactions must also be reported wherever applicable.
Taxpayers should cross-check their returns with Form 16, Form 26AS and the Annual Information Statement before submission. Taking the time to review these details can help avoid compliance issues and minimise delays in refund processing.
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