Salaried People : File your Return Correctly

Salaried People : File your Return Correctly

Most of the salaried employees tend to believe that their only source of taxable income is from their salary. However, in actual this is not so.

There are five heads of Income on which tax is payable.

1. Salary

2. House Property

3. Business or Profession

4. Capital Gains

5. Other Sources.

Generally, all the salaried employees fill up their income tax return declaring only their salary as per their form 16. But they must know that they may have other income taxable under 4 other sources as specified above. So they should properly declare their income from all the head as specified below. This may cost them a certain amount of additional tax but it also provided peace of mind as they will have all their income declared and nothing is concealed.

Income from Salary

Declare income as per your Form 16 received.

Here one thing is also to be noted that if you are employed with more than one employer during the financial year, you should add the gross salary of both the employers in declaring your salary.

Income under House Property

If you own more than one house property and if the other one is rented, you should declare income under head house property.

Income from Business & Profession

Generally, salaried people will not have income from Business or Profession but now a days most of the salaried employees are also active in share market.

It may be noted that the income from F & O trading is considered as business income as per Income Tax. So you should declare your F & O income as business income.

It may also be noted that intra-day share trading income is considered as speculation income under the Business Income Head.

Capital Gains

Salaried people can easily have income under head Capital Gains.

If you are active in share market, mutual funds etc. you can have income under this head. So you should care for calculating your exact amount of Profit from shares and declare under this head. Even if you have LTCG which is exempt from tax, it should be declared.

Income from Other Sources

This is mostly ignored head of income. All the salaried employee have their saving bank account. The interest earned on savings account is taxable under Other sources Income which normally no one declares.

Interest Income from investments like FDR, NSC, MIS is taxable under this head and should be reported accordingly.

So all the salaried people should keep above points in mind and prepare their income statement correctly which is to be submitted to Income Tax Department.

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