Filing Income Tax Return (ITR) every financial year is compulsory for every individual. ITR is the projection of your total income and taxes that you are liable to pay every year. Apart from the regular income that you generate annually, the Income Tax Department also requires you to report income from other sources. These include savings account, fixed deposit, dividend income, gifts received, interest on securities, among others.
Let’s have a look at the details that you are required to report to include under “Income from Other Sources.”
- Interest earned on Savings Account: While filing an ITR for interest on a savings account, you need to select the option “Income from Savings Account” and enter the exact amount that you have received from the savings or post office account. To know the exact interest amount, you can refer to your bank passbooks or visit the bank to collect the interest certificates. You can also download the certificate online via your internet banking account.
- Interest earned on Deposit Account (Fixed Deposit, Recurring deposit & others): If you have invested in a fixed deposit, the interest from the account is added with the other income such as professional income. The interest earned on the FD account is taxable. It is advisable to pay your FD taxes every year instead of doing it only when the FD matures. The banks deduct tax when the interest component from the deposits held in all bank branches is more than Rs.40,000 in a financial year. If the bank deducts TDS from the interest payments, the bank is required to issue you Form-16A.
Similarly, when your RD interest income of all bank branches exceeds Rs.10,000, a 10% tax is applicable on the interest earned. It is required to report the RD interest income in “Income from other sources.”
- Deduction on Interest Income under Section 80TTA: Whether you belong to the HUF community or you are a resident individual, the interest (up to Rs.10,000) earned from savings account with a bank or post office or co-operative society is exempted from tax. Under Section 80TTA, senior citizens are not entitled to avail of tax benefits.
- Family Pension: If a survivor is getting a pension on behalf of the partner who is deceased, then the survivor is required to present the family pension details in “Income from other sources.” The survivor of the government employee can claim for a standard deduction under Section 57. The deduction amount can be either Rs.15,000 or one-third of the family pension as per the income tax laws.
- Others: Apart from these, if you have received any other income in the name of royalty or winning a lottery, card games, puzzle or any other game of gambling, you should mention it under the “Income from Other Sources.” Also, such income is taxable. For this, you need to file ITR 2 form.
While filing an ITR 1 online, you’ll have to disclose all the income from other sources as a total amount. Read up on this more before you start your income tax return filing.