Income tax return form designed with different categories to disclose the different sources of income separately. It gives a clear idea of where the money comes and spends. The categories are following:
- Capital gains
- House Property
- Income from other sources
First, four basic categories serve the purpose of earnings but if someone earns from other sources that can not be defined in the above-mentioned categories it can be mentioned in the fifth category that is known as IFOS.
Define IFOS Under These 5 Headings
IFOS include family pension, savings account interest, other non-recurring income, tax benefits, gifts, movable property, etc.
Family pension is mentioned under the IFOS heading. If there is any deceased person in your family that has declared you as their heir and inherited a pension income then it should be mentioned in the tax return forms. You can earn tax benefit on 15000 or one-third of income and after this on remaining amount slab rates are applied.
If anything is inherited from an uncommuted pension source or if the taxpayer is involved in any authorized fund will be able to mention the income under IFOS headings.
We all love gifts but remember if you have received gifts worth Rs 50,000 in a year tax amount will be deducted. It is mentioned under section 56(2) it will be considered as income from other sources and you have to mention it in ITR form.
If the gifts are inherited from family members, your fiancees or partner, or your parents and siblings that will not fall in this category and will be considered tax-free.
All the movable and immovable items’ properties and income should be mentioned in the ITR form headings. Whether it’s shares, jewelry, gifts items, cards, or stamp duty, etc.
If there is any raise earned from fixed deposits and recurring deposits interest then tax rates will be applied to it. Many people have different accounts in different banks. Some individuals have access to post office accounts where they save money.
To save from any income losses or tax liabilities you should estimate the collective income earned from different savings account interests. Know if you are liable to pay tax or not. If interest income from various saving accounts is not above the defined threshold declare it under tax-free income otherwise it will be mentioned under IFOS.
Dividend Taxability rules have been modified from this year. Earlier, it was the company’s responsibility to separate the dividend and dividend distribution tax and pay. The dividend income above 10 Lakh was considered tax-free. But from a year on, it is the sole responsibility of each taxpayer to clarify the dividend (up to 10 Lakh) and pay the amount of tax according to the slab rate. (Check the latest income tax report rules also)
Many people have an interest in horse racing, lottery, gambling, betting, crosswords puzzles, cards and they earn from this source. All these are known as non-recurring income sources and that all should be mentioned in the ITR IFOS category. No tax relief for such income.
We hope, this information will be fruitful to you and you won’t find any difficult to fill the ITR form as you know what things can consider as IFOS or will they be taxable or not.
Before submitting your ITR form you must consider the financial advisor or CA. Check the official website to know the latest rules and regulations of income tax. It will help you to know the disclosure of income in different categories and applied tax rates.