With the tax filing season just in, you may have started compiling information to fill your returns or pay additional tax.
If you are filing through an auditor, chances are that your auditor will ensure that you have paid your taxes (called self-assessment tax), wherever applicable, on income that did not suffer TDS.
But if you are filing your own returns, online or offline, ensure that you take in to account all your income and pay self-assessment tax if any. A tax return, without payment of self-assessment tax can be treated as defective soon. A proposal to amend the tax laws to this effect was mooted in March.
What you can miss
If your bank or an NBFC had deducted TDS on your fixed deposit, then you would remember to disclose the income and also the tax deducted while preparing the returns. But many a time, income for which TDS was not deducted would escape your purview. Here are some such examples:
1. Interest income on fixed deposits if TDS is not deducted
Your annual interest income from a bank deposit may be lower than Rs 10,000 (Rs 5000 for company deposits) and as a result, the bank may not have deducted tax. But this does not make the income ‘tax free’. You would have to add them to your ‘income from other sources’ while doing your returns.
In case of recurring deposits with banks, no TDS is deducted, irrespective of the quantum of the interest. But the interest income is taxable. Yes, there is always the running debate of whether tax has to be paid on accrual basis or on receipt, when the deposit matures.
Popular expert opinion is that you may follow one of these (as no TDS is deducted) but paying tax on accrual helps spread the burden (instead of paying it in one go in the year of maturity). Also, sometimes disclosing the income in one shot, on deposit maturity, may even push you to the next higher tax bracket (if you are in the 10% or 20%).
2. Interest income on savings bank
Interest income on your savings bank accounts is exempt up to Rs 10,000 a year. Anything over this will be taxable. As your bank is not going to deduct TDS, do remember to include this income while computing your self-assessment tax.
3. Interest income on cumulative deposits
You may be holding a cumulative deposit that is maturing after a couple of years but your bank or company may have already deducted TDS on it. Besides intimation from the bank/company, you will actually see this in your 26AS Tax credit statement (available for you to view through your bank account or in the Income tax website).
It may be better for you to disclose the respective income in the year in which such TDS is deducted, to make it easier to correlate.
4. Interest income from bonds/debentures
If you have been holding infrastructure bonds that you bought a couple of years ago, remember only the principal amount would have received tax deduction. Interest payout from such bond is a taxable income. Again, if these did not suffer TDS, you may miss them out in your calculations. Do search through your bank statements or intimation from the company on interest credited for the year.
But remember, interest on tax-free bonds (such as the NHAI bonds) is exempt from tax.
5. Capital gains on mutual funds and equities
If you redeemed a debt fund or Fixed maturity Plan (FMP) in 2012-13, check if you have made any capital gain. If so, do take them in to account in your tax filing. Add them to your total income if the gain is short term (less than one year) or calculate the profits with indexation/without indexation (whichever is beneficial to you) and apply 10% or 20% (with indexation) as the case may be to compute tax.
Your FundsIndia account would have a summary of your capital gains.
If you sold your shares within one year of purchase, it attracts short-term capital gains tax. Check your brokerage account to know such transactions. Most online portals would have a neat classification of your short-term and long-term gains.
Remember to pay your self assessment tax, if the total tax calculated falls short of the tax paid by you so far either by way of TDS (deducted by employer, banks or companies) or advance tax. This may prevent any penalty/interest being shelled out by you later.