Interest is fully taxable Best Taxsaving Plans In india, best financial Planing in india,
Interest is fully taxable Best Taxsaving Plans In india, best financial Planing in india,

One of the misconceptions that many investors have in mind is that the Interest component earned through their investments in Fixed Deposits and many other financial products are non taxable. This belief crops from the fact that the principal amount is fully declared and tax need not be paid for the interest accrued from the same.

In reality, irrespective of whether it is through Fixed Deposits or National Savings Certificate (NSC), the interest component is fully taxable. Remember, investing in products that yield higher interest to you in a tax free manner is profitable since it helps beat inflation in the best possible manner. For instance, if the inflation trend year on year is around 8% and the interest you earn out of investing in Fixed Deposits and National Savings Certificate is around 6.5%, you are nowhere near beating the inflation rates.

Many building owners permit installation of Mobile Towers on their ceiling. Any rent received from such installations is fully taxable. The owner is liable to show this as an income along with his other ones when he files his Income Tax Returns for the fiscal year. Not providing details about rent received from installation of Mobile Towers, at the time of filing Income Tax Returns is considered as offence which is punishable under the Income Tax Act.

Investment in Certain Mutual Funds and Capital gain on Stocks that is long term in nature is exempt from tax upto 1 Lakh Rs Gain Per Year in case of Long term. However, the same needs to be declared under the exempted income column while filing Income Tax Returns for the subject fiscal year.

You can also invest in Provident Funds returns from which are totally exempted from tax. Superannuation Funds received by people at the end of their career is also completely tax free.

Calculating TDS at the beginning of the year is mostly based on your anticipation of income during the complete year.  The actual income may be higher or lower based on the financial happenings during the ear. If your actual income exceeds your anticipated income at the end of the fiscal year, you may have to declare the complete amount while filing TDS at the end of the fiscal year. However, if the actual income at the end of the fiscal year is lesser than that anticipated one at the beginning of the fiscal year, you may be eligible for a refund.  If in case you come to understand that you are eligible for  a refund while calculating your tax liability at the end of the fiscal year, ensure you mention your correct Bank details while filing your tax returns. Mentioning Bank Details in the column provided for the same in the ITR Form will help you get your refund on time provided all details you provide are correct.

It is the responsibility of every honest citizen to declare the Interest component earned through financial products while they file their Income Tax Returns. In case you are not clear about declaring certain components in the ITR Form while filing your tax returns, take the help of professionals who can provide you clarity.

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