203 Responses to Interest on Saving Bank Account : Tax, 80TTA,ITR

  1. krishna says:

    Hi,

    I am having a query regarding TDS on saving bank account’s interest.
    What if i have deposited 10 lakh in my saving bank account and i will get around 40000 inr as an interest on it for a year. Will bank deduct TDS on it automatically ?
    I have got some rumors that from this financial year, banks will deduct TDS on saving account’s interest.
    Is that true ?
    Please tell if you have any updated info on this topic.

    • Sanjay Prasad says:

      Your question is not clear about the type of deposit.

      If its Fixed Deposit then, yes TDS will be deducted at 10%, i.e. Rs.4000 out of Rs.40,000. Again you have to pay more Tax based on your Tax bracket.

      If you just keep Rs.10,00,000 in your Savings Account then you get 4% interest which comes around Rs.40,000 (which you mentioned). Bank won’t deduct any TDS on Savings Account. But you have to show Rs.40,000 in Income from Other Sources and you will get deduction of Rs.10,000 under 80TTA. You have to pay Tax for the remaining Rs.30,000 as per your Tax bracket. If your annual income is below Rs.2,50,000 (including interest that you earned from Savings Account) then no need to pay any Tax.

      However, you might be questioned for the Source of income by IT Dept. for such big amount.

    • Akash says:

      Hi,

      If i am getting some money credited to my savings account and i have no income at all , do i have to pay any tax on it?
      Lets take a rendom figure 5 lac

  2. sanket says:

    i got notice from income tax on 2-sept-2016 for not showing/less showing interest on saving account for FY 10-11. I checked ITR for FY 10-11. interest is not shown. so now how much penalty i will have to pay ? i am confused about penalty since notice is for FY 10-11 . ( 6 years back )

  3. ramsaran says:

    Whether the interest earned on tax saver FD to be included every year in the Income of that year? if interest not be include in income can be all year interest add on maturity year income.

    • bemoneyaware says:

      Yes Interest earned on Tax Saver is to be included in income preferably for that year.
      If TDS is deducted for the year it is best to claim it in the same year.
      Else you can claim interest at maturity

  4. Sanjay says:

    Very Nice Article.Kindly guide what will be last date of depositiing advance tax on interest, so earned on more than Rs.10000/- on savings accounts.Is it before 31st March of any finacial year but usually banks provide interest on savings balance on last date ie. 31stMarch only and then calculating total interests & depositing on last date of any financial year is an herculean task being so much rush in Bank’s branches ot bank’s website getting usually choked due to overloading. Pls guide.

    • bemoneyaware says:

      If you estimate that you will owe more than Rs.10,000 on March 31 in taxes (after deducting TDS) then you should pay advance tax. Our article Advance Tax:Details-What, How, Why discusses it in detail.

      Advance tax dates and tax payable

      From FY 2016-17 For both individual and corporate taxpayers

      Due Date Advance Tax Payable
      On or before 15th June 15% of advance tax
      On or before 15th September 45% of advance tax
      On or before 15th December 75% of advance tax
      On or before 15th March 100% of advance tax

  5. Dani says:

    Very informative.
    For savings deposit interest, is it the period or the date interest is credited to be considered. I have received interests of Rs. 5425 on May 4, 2015 for the period 1-11-2014 to 30-4-2015; Rs. 745 on Nov 4, 2015 for period 1-5-2015 to 31-10-2015; and Rs. 6504 on Apr 1, 2016 for period 1-11-2015 to 31-3-2-16.
    Will the interest received for 2015-16 be Rs 5425 + 745 = 6170; or
    745 + 6504 = 7249; or 5425/6 + 745 + 6504 = 8153.17?

    • bemoneyaware says:

      Banks should actually give the interest per financial year. else it becomes difficult for person.
      Saving bank interest is calculated on the daily balance in your account.
      No tax is paid on Interest upto 10,000 . So if your interest is less than 10,000 it is OK. Else it becomes slighlty tricky.

  6. Jagatheesan says:

    Whether the interest earned on tax saver FD to be included every year in the Income of that year? Since the interest is reinvested is it exempted like NSC interest and the whole interest earned on maturity will be added to income. Pl. clarify

    Jagatheesan

  7. Subha says:

    Dear Sir,
    Please inform if interests earned in salary accounts also taxable just like savings bank account.

  8. Mohit says:

    I have missed claiming medical bills of 15000/- with the employer. Now how should I claim that amount while filing IT return?

  9. Sheshank says:

    1. I have an auto sweep SBI account, I have got interest of 1,300 in my main saving account whereas I have got an interest of rs 1,00,000 from my auto sweep deposit account. Is deduction under section 80TTA 1,300 or 10,000

    2. I have got statement interest accrued and interest paid for this year. Now as per the accrual accounting, I need to pay tax on both interest accrued and interest paid. My question is “Do I have to subtract the interest accrued in previous year, because I have already paid tax on the accrued interest of last year”

    So Tax to be paid on which of the two –
    a. Interest paid (Current Year ) + Interest Accrued (Current Year)

    or

    b. Interest paid (Current Year ) + Interest Accrued (Current Year) – Interest accrued (Previous Year)

    • Mohit says:

      it should be: Interest paid (Current Year ) + Interest Accrued (Current Year) only

      • Sheshank says:

        But what about the interest accrued last year. I paid tax for it last year, it might be paid this year. Why to give tax twice ??

        • bemoneyaware says:

          Lets get the facts:
          -You should pay interest for this year only, whether accrued or paid.
          -You need to pay tax on it only once.
          Now Interest accrued this year is shown how: is it interest accrued over last year + this year or only this year?
          If you could get answers to these questions or send us an email with details we can look into it.

          • Sheshank says:

            Let me give you the facts :

            My interest for FY 15 was – Interest paid during fy 15 – 52000 & interest accrued during fy 15 – 40000.
            In FY 15 I paid tax on 920000 (52000 + 40000)

            Whereas for FY 16: Interest Paid during FY 16 – 60,000 & Interest accrued during FY 16 – 34000

            Now how much to pay tax on FY 16…

  10. sumit says:

    I am filling return ITR1:
    1. Under Income Details: (B3). Income from Other sources (Ensure to fill Sch TDS2) – I have entered Saving Bank Account Interest which is more than Rs 10,000 from 3 saving accounts and the same amount is mentioned as a deduction in (C17). 80TTA.
    What do I need to fill in Tax Details section Sch TDS2 if TDS has not been deducted by banks.

    2. Under Taxes Paid and Verification Page: D20. Exempt income only for reporting purpose – Do I need to show interest I’m getting on PPF, EPF account and Dividends received from Shareholding.

    Thanks

    • sumit says:

      If someone could please answer my questions –

      I am filling return ITR1 through Quick File menu:
      1. Under Income Details: (B3). Income from Other sources (Ensure to fill Sch TDS2) – I have entered Saving Bank Account Interest which is more than Rs 10,000 from 3 saving accounts and the same amount is mentioned as a deduction in (C17). 80TTA.
      Do I need to fill anything in Tax Details section Sch TDS2 if TDS has not been deducted by banks.

      2. Under Taxes Paid and Verification Page: D20. Exempt income only for reporting purpose – Do I need to show interest I’m getting on PPF, EPF account and Dividends received from Shareholding.

      Thanks

  11. nidhi says:

    you have mentioned that TDS will not be deducted from bank side ,but in my form 26S my bank has shown the TDS under section 194A(is it not the TDS deducted on saving bank account interest).

    and do bank deduct TDS only on the amount above 10000 of interest

  12. Prashant says:

    This is the best site for guys like me who are not from accounting background. Kudos to you for such a wonderfully compiled information on single page. All my queries got resolved in this.
    Thank you once again.

  13. Sheshank says:

    Few questions :

    1. I have an auto sweep SBI account, I have got interest of 1,300 in my main saving account whereas I have got an interest of rs 1,00,000 from my auto sweep deposit account.

    2. I have got statement interest accrued and interest paid for this year. Now as per the accrual accounting, I need to pay tax on both interest accrued and interest paid. My question is “Do I have to subtract the interest accrued in previous year, because I have already paid tax on the accrued interest of last year”

    So Tax to be paid on which of the two –
    a. Interest paid (Current Year ) + Interest Accrued (Current Year)

    or

    b. Interest paid (Current Year ) + Interest Accrued (Current Year) – Interest accrued (Previous Year)

    • Sheshank says:

      1. I have an auto sweep SBI account, I have got interest of 1,300 in my main saving account whereas I have got an interest of rs 1,00,000 from my auto sweep deposit account. Is deduction under section 80TTA 1,300 or 10,000

      2. I have got statement interest accrued and interest paid for this year. Now as per the accrual accounting, I need to pay tax on both interest accrued and interest paid. My question is “Do I have to subtract the interest accrued in previous year, because I have already paid tax on the accrued interest of last year”

      So Tax to be paid on which of the two –
      a. Interest paid (Current Year ) + Interest Accrued (Current Year)

      or

      b. Interest paid (Current Year ) + Interest Accrued (Current Year) – Interest accrued (Previous Year)

  14. Ankit Mishra says:

    Sir i have amount of about 3.5 lac in saving account
    So the intrest earn on it is taxable or not???

    • bemoneyaware says:

      Yes Sir amount in Saving bank account earns interest at the rate of 4%(most banks) Some banks like Kotak,Yes Bank give 6%.
      This interest comes under Income from Other sources.
      Deduction of Rs 10,000 is available on interest of Saving Bank account.

  15. Yogender says:

    Hi,

    I have a savings bank account & have got aroung 10500 as interest. So can i get an incometax exempt via 80TTA

  16. Shantnu says:

    I have earned 11000 as savings account interest in last financial year. Before filing return , can I deposit the tax online? Is it through challan no 282? What should be type of payment?is it 300 Self assessment tax?

    • bemoneyaware says:

      When one needs to pay tax , Advance Tax, Self Assessment or Regular Assessment tax,Tax Payment Challan, ITNS 280 Challan is used to pay Income Tax due. For income earned between 1 Apr 2015 to 31 Mar 2016 Please select Assessment Year as 2016-17.
      Thanks for question. We have also updated the article.

  17. Vinod Kumbar says:

    my wife has left job in year jan 2015. and started beauty parlour shop in june 2016. For last AY 15-16 we filed income tax has per her form 16 from the company.
    income from her parlour is less than 1.5 lakhs upto march 16. can we file return ourself or need the accounts to be audited by CA?

    • bemoneyaware says:

      A very interesting question and lot depends on the interpretation of law.
      When you have income from Business or Profession you can either file ITR4S or ITR4.
      Sec. 2(13) Business means and includes any trade, commerce or manufacture or any adventure or concern in the nature of trade, commerce or manufacture
      Term profession is not clear for things like beauty parlour. It means having some degree of learning. There are some professions for which you are required to maintain books and get audited.
      If you see the discussion at CaclubIndia it says beauty parlour should be a business
      But if you see Query related 44ad it says beauty parlour is a profession.
      Do let us know what you decided?

      Information for maintaining accounting records
      The following professions should maintain accounting records if their gross receipts are more than Rs. 1,50,000 in 3 preceding years for an existing profession. This also applies to a newly set up profession whose gross receipts are expected to be more than Rs. 1,50,000. The accounting records to be kept have been prescribed in Rule 6F:

      Legal
      Medical
      Engineering
      Architectural
      Accountancy
      Technical consultancy
      Interior decoration
      Authorized representative — A person who represents someone for a fee before a tribunal or any authority constituted under law. It does not include an employee of the person so represented or someone who is carrying on the profession of accountancy.
      Film artist — This includes a producer, editor, actor, director, music director, art director, dance director, cameraman, singer, lyricist, story writer, screen play or dialogue writer and costume designers.
      Company secretary

      Audit of accounts is compulsory by a Chartered Accountant for the following persons

      Tax Payer Compulsory Audit required when
      A person carrying on Business If total sales, turnover or gross receipts are more than Rs. 1 crore
      A person carrying on Profession If gross receipts are more than Rs. 25 lakhs
      A person covered under presumptive income scheme section 44AD If income of the business is lower than the presumptive income calculated as per Section 44AD and the person’s total income is more than the minimum income which is exempt from tax.
      A person covered under presumptive income scheme section 44AE If income of the business is lower than the presumptive income calculated as per Section 44AE.

  18. Abhinaba says:

    I have some FDs in SBI & two saving accounts in SBI and UBI banks. As per Form 26AS My TDS has been deducted from SBI bank for my FDs even i have not fall in TAX slab. Accordingly i submit ITR-1 in online mode & added savings interest (Rs. 6730/-) in other income(total Rs. 69k) but forget to deduct it under 80TTA . Will it create any problem ?

  19. Yogesh says:

    Sir, I had earned total interest of 10,623 from Bank FD in FY 2015-16. I submitted form 15G so no TDS is deducted from Bank. This interest earned is reflected in 26AS. Now, I fall under 20% tax slab. While filling ITR1 for FY15-16 AY16-17, what should I fill in the field ” Income from other sources. 10,623 or 623 only … as 10,000 is exempted and tax free. Please clarify this.
    Also, Can I claim 10,000/- under 80TTA here

  20. Aadrsh pratap singh says:

    Hello sir,
    I have a joint bank account with my wife. Our bank interest for the year from that account is 12000rs. Is it possible to show the whole interest amount in my wife’s ITR as she is a housewife so there is no income in her return, to decrease my total taxable income.
    And if not, then in what proportion the interest amt will appear in our Tax returns.

    • bemoneyaware says:

      Interest on saving bank account upto 10,000 Rs is tax free.
      You owe tax on only 2000 Rs.
      As your wife is not working, her amount you transfer to her would still be clubbed with yours.
      Will you file ITR for your wife for just 2000 Rs?
      We would recommend you to show 12,000 under 80TTA, claim Rs 10,000 deduction and pay tax on Rs 2000.

      • Aadrsh pratap singh says:

        Ok sir thanks,
        but what if the intt. Amt is 30,000. Then may i show the balance amount(20,000) in her nil return by showing tution fee as her only income ( as i’ll show her total income <2,50,000)
        I mean is there any particular rule regarding joint bank account intt?

  21. Koxbox says:

    Sir, I have abt 18 lakhs in my hdfc savings account, I’m working on ship and completing 183 days for nri requirement, understand the interest I earn is considered as income from other sources, how much tax do I need to pay ?

    • bemoneyaware says:

      There was a change of rule of calculation Indian seafarers, sea period spent by a ship in Indian coastal waters is also taken into account for computing the non-resident status and the resultant tax concessions. Livemint article So please check if it affects your NRI status.
      If your status is ‘resident’, your global income is taxable in India.
      If your status is ‘NRI’, your income which is earned or accrued in India is taxable in India.
      Interest income from fixed deposits and savings accounts held in Indian bank accounts is taxable in India. Interest on NRE and FCNR account is tax free. Interest on NRO account is fully taxable.
      What kind of account do you have in HDFC- A simple saving bank account?
      Interest on ordinary saving bank account is tax exempt upto 10,000 and remaining is taxed as per your income slab,its considered Income from other sources.
      Please check your HDFC account to see the interest deposited. It would be deposited on 30 Sep/1 Oct and 31 Mar,
      You get 4% interest on HDFC Saving Bank account. Our article Saving Bank Account:Do you know how interest is calculated and more explains it in detail.

      If a person is a Non-Resident Indian (NRI), he can open two kinds of account in India –
      a non-resident rupee accounts (NRE), and
      non-resident ordinary rupee accounts (NRO).
      An NRI can have Non Resident External (NRE) accounts, Foreign Currency Non Resident (FCNR) or Non-Resident Ordinary Rupee Account (NRO Account). Our article, Bank Accounts for NRI:NRO,NRE,FCNR, Their comparison, talks about it in detail.

      Interest earned on Non Resident External (NRE) accounts and Foreign Currency Non Resident (FCNR) accounts are tax free in India. Hence, there would be no TDS.

      NRO accounts may be opened in the form of current, savings, recurring or fixed deposit accounts. Interest earned on the Non Resident Ordinary Account (NRO) is taxable and will be subject to a TDS of 30%. This holds true for Post office also. There is no basic exemption limit. For example, interest earned by resident Indians from bank deposits is subject to TDS only over and above a limit of Rs 10,000. No such limit applies for NRIs.

      • Koxbox says:

        Thank you very much for reply. I’m working on foreign flag ships not sailing in Indian coastal waters so I will continue to meet nri requirements as before.
        I have consulted the bank and they said I have ordinary savings resident account .
        On the other hand , I also asked Citibank ( wife’s account ) and they mentioned no tax applicable for interest earned on savings account, 4% quarterly payments , but she is not salaried. is that correct ? ( suppose if I transfer funds to her account )

        If I change my account now to NRE or NRO I can avail tax benefit, however the moment I stop sailing and retire, what will happen to the fund in this account ?
        Thank you again for ur time

        • bemoneyaware says:

          Saving interest upto 10,000 Rs is tax free. As she is not working, her income will be clubbed with yours.
          Unless she invests in PPF or tax free bonds.You can read our article clubbing of Income for more details.
          If you change your account to NRE and NRO then from the date of change you can avail tax benefit.
          You can change the status when you come back. You can read Business standard article for more detail.
          During the period that an individual is a NRI, they may hold assets, investments, and bank accounts in India. Special accounts exist for NRIs who hold investments in India. Generally an Indian bank account held by an NRI would be either a Foreign Currency Non-Resident (FCNR) account or a Non Resident External Rupee (NRE) account.

          These accounts are opened for the purpose of depositing income earned overseas. The funds held in these accounts can be remitted back overseas freely, subject to terms and conditions of the resident country. Upon re-establishment of residency, an NRI must re-designate Indian banking accounts from FCNR/NRE to the RFC accounts mentioned below.

          Similarly, returning NRIs must inform companies in which they have shares of their change in residency status, as well as firms in which they may own partnership interests.

          Resident Foreign Currency (RFC) Accounts

          Indian residents may maintain an Resident Foreign Currency (RFC) account for foreign currency assets which were held outside India at the time of their return. Foreign exchange amounts received as pension or benefits from employers outside India, gifts, or proceeds of life insurance policies in foreign currency may also be credited to this account.

          RFC accounts can be maintained in the form of current or savings or term deposit accounts. The funds in RFC accounts are free from all restrictions regarding utilization of foreign currency balances, including any restriction on investment outside India. Residents can use their RFC accounts to reinvest sale proceeds of overseas assets abroad.

  22. karthik says:

    my income is 4 laks per year how much tax i have to pay

  23. Krishna Rao says:

    Hi, For year 2013-14 I was working in UK. Because of Dual Taxation benefits where a person is required to pay tax in only one country at a time. my company needs refund from Indian Tax authority. They applied for Refund but, now Tax authorities are scrutinizing my case and called me to come in person to meet them and produce lots of documents- complete year bank savings account statements, Shares and Mutual fund statements, Salary Slips, Asset details, Foreign bank statements. Since all this are old for 2013-14, I am unable to collect some of the documents. Why are tax authorities Scrutinizing now after 3 years and requesting so many documents ? Also at that time I forgot to mention my savings bank account interest components. Will there be any fine and penalty for this case? What will they do after collecting all this information? how many such scrutinizing cases are coming per year? Can you please let me know more details.

    Awaiting your response.

    • bemoneyaware says:

      Sir that’s typical scrutiny process. I have personally gone through that.
      You are supposed to keep your documents for 6 years.
      Interest on Saving Bank account till 10,000 is tax free under section 80TTA . It depends on the Assessing officer and how serious he thinks it is, whether that was intentional or accidental.
      Best of luck.

  24. Nimu says:

    was bank sb interest taxed from 80TTA was introduced. If yes what was the limitation or slab for the years prior to the introduction of 80TTA

    • bemoneyaware says:

      80TTA was introduced in Budget 2012 and was applicable from 1 Apr 2013 i.e for FY 2013-14.
      Before than entire interest earned on SB account was taxable as per your income tax slab

  25. Yash says:

    Hi, I just want to know if I sell a land of Rs.95,00,000 and pay the tax to govt. and then keep Rs.70,00,000 to my only one savings account then what I should do next and what are the ways of saving any extra tax on interest from that money. Also I need to know what amount I get as interest after tax deduction. Please answer me as soon as possible.

    • Income tax says:

      if u sell ur propery income is calculated by Income for capital gain head (see calculation in Google-capital gain) after calculation u will get some amount as income that is added to your total yearly income and you need to pay tax on total income(which comprises of salary, capital gain, income from profession and etc.) – this for year of sale

      2) 70 lakhs in savings ACC after one year u will get interest of 2,80,000 from Bank so from this 10000 is exempt form tax then remaining 270000 will be added to ur total income and u need to pay tax on total income.

      Total income = salary any + professional income + capital gain + income from other sources.

      Sales of property – capital gain
      Interest – other sources.

      Hope clear.

  26. Yash says:

    Hi, I just want to know if I sell a land of Rs.95,00,000 and pay the tax to govt. and then keep Rs.70,00,000 to my only one savings account then what I should do next and what are the ways of saving any extra tax on interest from that money. Also I need to know what amount I get as interest after tax deduction.

  27. Satyajit says:

    Hey, I don’t know if you will see this but I really hope that you do. I can really use ur expert advice. Please help me out with ur advice since this is my 1st time dealing with a bank–>
    I have graduated this year & want to devote the next 1.5 yrs in preparing for IAS. So won’t join a job. Now my father has asked me to open a Savings Bank Account where he will be sending me 3.9 lakhs to sustain myself during that time (accommodation + food + grocery + electricity + maid + tuition + books, in short, for everything). So I have 3 short questions –>

    1) Do I have pay income tax on the interest (considering that I am jobless)?

    2) Will my father have to pay interest for the money he will be sending me from his account?

    3) I don’t think that I will need the whole amount. So where can I invest (say 1 lakhs) to get maximum return after 2 years?

    Please reply & clear my doubts…

    • Satyajit says:

      Sorry. I seem to have made a silly mistake in my post.

      * I meant “Will my father have to pay TAX on the money transferred from his account to mine”. (Not interest).

      • Income tax says:

        U don’t have to pay any tax because u r jobless that means u don’t have income. Income tax is paid only when income is above 250000, Interest u get on 3.9 lakhs will less than 250000 so no tax.

        • D. K. Tripathi says:

          Dear Sir, I want to remind you if interest rate getting more than ₹10,000.00 . That will be Taxable. So please let me clear again.

          Thanks with regards.

    • bemoneyaware says:

      Best of luck for your IAS preparation.
      As you are adult your father can gift any amount to you. There will be No tax issue.
      1. No as it is not income you don’t have to pay any tax on it it.
      2. As your father is sending from taxable income, it would be accounted in his Income. No specific tax for sending money to you
      3. Maximum return is possible only in equity or stock market but it comes with greatest risk. You have to decide when you will require the money, at specific intervals or lump sump. You can invest in Fixed Deposit or Debt Mutual Funds or divide money between equity and debt, based on your risk profile.

    • bemoneyaware says:

      Is the money in saving bank account only . Then it will earn 4% interest.
      1. Total interest would be less than 2.5 lakh so you won’t have to pay any income tax.
      2. No. You are an adult and your father is paying from his taxable income. So he gifts the money to you and then its your money.
      3. As you don’t need the whole amount and you have 2 years either FD will be ok or debt mutual fund. FD interest will be taxable so you would have to fill Form 15G so that bank does not deduct TDS if interest is more than 10,000 Rs in a year

  28. Sonali says:

    If I got 55,000 interest on saving, its clear to show it under ‘Income from other sources’ and claim under sec 80TTA while filing ITR1. But its mention under ‘Income from other sources’ to ensure to fill ‘Sch TDS2’. How to fill that? i dont have any details.

    • bemoneyaware says:

      TDS2 has to be filled when TDS is deducted for ex on interest on FD if interest on FD is more than 10,000 Rs.
      For Saving bank account no TDS is deducted so just fill it as shown in images in the article, as Income from other sources and claim it under section 80TTA

  29. Neha says:

    Is 80AAt deduction applicable on FD’s interest also

  30. richa gupta says:

    Hi team,
    i was overseas for 2 years and transferred my money in regular saving accounts in India in batches.In the bank they transferred the money to MOD accounts or term deposit accounts periodically on every 10th of the month. I am getting interest for this.For those two years,i did not filed my IT returns as i was not in the country.I came back last year and am filing my IT returns.I got a letter from IT department for filing IT returns for last year.Can you please tell how much is the tax we have to pay on interest earned from term deposited money in bank.Do the bank also cut some interest at source.

  31. naresh kr says:

    i have a joint account and total interest earned in saving bank category is Rs5586. and total interest urned from Fixed deposit is Rs7899. please tell me that should i add both of these and show under income from diff source column or should i only show my fixed deposit interest under this column.

    and how to claim an exemption u/s 80tta and how much????

    thank-you

  32. gomathi says:

    TDS deducted by Axis bank as shown in form 26AS is 2600 (for interest of 26000)
    Interest received on savings account(from same Axis bank) is 7000 as seen in axis bank account statement

    in this case,should i show 33000(26000+7000) as income from other sources and show 7000 in 80TT???
    or
    should i show 26000 as income from other sources and show 7000 in 80TT???(assuming 26000 mentioned in form 26AS includes both FD and savings bank interest)
    plz clarify

    • bemoneyaware says:

      Income from Other sources : 33000(26000 + 7000)
      Claim 7000 under 80TTA
      Claim TDS deducted in TDS section.
      The net income would become 26000 . Interest on it is taxable as per your income slab.

  33. Tanmay says:

    How to find the interest earned on saving bank account?
    For example I have interest deposited to my account 6106.00 on 30/06/2014, 6175.00 on 31/12/2014 and 6682.00 on 30/06/2015. So should I consider those amounts which are deposited in between 01 Apr 2014 and 31 March 2015 or I will have to calculate it on monthly basis. My assumption on basis of above amounts is that my interest earned for Assessment year 2015-16 is 12281.00.
    Please let me know is it right?
    Thanks.

    • bemoneyaware says:

      Process of interest calculation is as given below.
      Typically banks credit interest from 1 Apr to 31 Mar in two chunks. HDFC does it on 1 OCt and 31 Mar but SBI does it in June and Dec.
      So you can either use or calculate it the way given below.
      I typically show the interest credited in bank .

      The interest is calculated on the daily balance in your account. Lets show it by an example
      Say on 1st Aug Rs 70,000 is credited into your account. On 5th August after some withdrawls balance in your account is Rs 55000. You had Rs 70,000 for 4 days at 4% per annum. So how much interest did you earn? The formulis:
      Interest = Principal or amount in the account * Number of days * Daily Interest Rate

      Daily Interest Rate = Interest rate per annum /365 days
      At 4% Daily Interest Rate is: 4%/365 = 0.010958%

      • Tanmay says:

        Can i declare interest on a saving account on receipt basis i.e. declare them in the financial year in which they are recieved in my account instead of calculating for every respective month, as its a tedious task.
        Please tell.
        Thanks!

  34. vijesh says:

    I am under 20% tax paying slab. I have submitted ITR 1 without declaring the interest appr:4k on SB accounts for the tax year 2014-15. Is it fine to send ITR V without amending it. Advise me if I have to use ITR 2. Anyway amount less 10000 is not* deductible, so is it fine to ITR V (based on ITR 1).

    • bemoneyaware says:

      Sometimes ignorance is not bliss.
      Income from Saving Bank account is considered under Income from Other sources. So you don’t have to use ITR2. ITR1 is fine.
      As you said, interest upto 10,000 is tax exempted.
      So it’s upto you to whether you want to revise your return.
      You can add interest from Saving bank account as Income from other sources and then claim deduction under 80TTA. Net result same .

  35. vijesh says:

    I am under 20% tax paying slab. I have submitted ITR 1 without declaring the interest appr:4k on SB accounts for the tax year 2014-15. Is it fine to send ITR V without amending it. Advise me if I have to use ITR 2. Anyway amount less 10000 is deductible, so is it fine to ITR V (based on ITR 1).

  36. Savi says:

    I left my job last year in june end, so i have following queries.

    1. I closed my ULIP plan which was 7 years old and i received Rs.196000 on closure. Do I need to declare this amount , if yes,the under which part and will it be taxable?
    2. I received my PF closure amount of Rs 67000 approx. Do I need to declare this amount , if yes,the under which part and will it be taxable?
    3.I am currently not working so I invested my above received amount in the form of FDs and RDs. So my question is do i need to show the interest from these savings as Income from Other sources? However the RDs which i have opened in my ICICI bank are non taxable. Please advise

    • Kirti says:

      1. As you have surrendered ULIP after 5 years the surrender value received is tax free. You show it in exempt Income
      2. If PF closure happened after 5 years it’s tax free. Show as exempt Income
      3. Interest from FD and RD are taxable as per your income slab whether TDS is deducted or now. You have to show these as income from Other sources.

  37. Daisy Talukdar says:

    I have two accounts in SBI and HDFC banks. As per Form 26AS My TDS has been deducted from HDFC bank even i have not fall in TAX slab. But in SBI account I also get interest for which TDS was not deducted. Now if I shall file the ITR-1 for Tax refund should I show both interest (income other sources) from SBI and HDFC or I need to follow the Form 26AS which shown only HDFC interest.

    • bemoneyaware says:

      Sir TDS would be deducted on Interest in FD not on saving bank account.
      TDS would be deducted as Interest on FD when interest exceeds Rs 10,000.

      You have to show all your bank accounts.

  38. shine says:

    My TDS is already deducted BUT when i fill online return form so notice that i forget to mentioned my interest on saving account. my total interest of June and Dec month is 55000. so what is my income tax amount on saving bank interest pls help me. and i show it in e return form, should i fill form 280 and what is the procedure and after filling it how can i mentioned my interest on saving account in e-return form

  39. Atindra says:

    My FD, RD & SB total interest for a financial year is less than 10000. How to show it in ITR-1. Please guide.

  40. shadab says:

    Hello, i am working in saudi arabia and per month i transferring money 60000 rupee india in my brother’s saving account.It is any intrest amount is taxable. Plz help me to know how i save tax, I am beginner for this all tax and all that.

  41. Suresh says:

    My wife (house wife) received around 16,000 as bank interest. So, TDS was deducted by bank . She has PAN, but never filed IT as she is not eligible (income less than 2 lak) . Can I file her return separately and claim the refund. Or do I need to show this amount in my returns. If so, how to show this in my ITR2 form..
    Please suggest

  42. Malathi Murali says:

    I am a retired professor from Osmania university and I am drawing pension. I estimated interest on my savings account and interest on deposits and filled up ITR1 online. However it is NOT accepting my submission and asking details under TDS2. TAN number etc. Wile my banker did not deduct tax on Interest in my savings account, I added ESTIMATED interest for this year on my couple of TAX FREE DEPOSITS – I submitted Form 15 H for not deducting interest. But I am showing interest in my returns. How do I get details to fill in TDS2 under Para 20 and how do I fill this up. I didnt have this problem last year. Please respond

  43. Deepak says:

    Hai

    My gross income is 2 lakh 40 thousand rupees per year.

    I HAVE 3 SB Accounts (2 sole accounts, 1 either or survivor with mother)

    MY MOTHER IS A HOUSEWIFE.

    Recently through property sharing my mother received 3 LAKHS CHEQUE.

    My mother deposited in HER EITHER OR SURVIVOR ACCOUNT.

    WILL I BE TAXABLE???. BECAUSE THE SB ACCOUNT INTEREST ALSO WOULD CROSS 10000 and my GROSS INCOME ALSO WOULD ACROSS 250000 (TAX SLAB)

    KINDLY CLARIFY…Expecting a reply at the earliest

    Thank You

  44. Kanaga says:

    Hai Everyone

    I am a housewife (Home Maker).therefore i have no income

    Recently my father passed away and i received my share of property (ie) around 5 lakh rupees.

    I want to open an SB ACCOUNT and deposit this money there, so that i can give it to my son when he needs some money.

    But i am afraid whether i will be posted income tax , since income from SB Interest will cross 10000 rs.

    Kindly clarify….whether i would be taxed.

    I WANT TO SAFEGUARD THIS MONEY WITHOUT MY HUSBAND’S KNOWLEDGE.

    Kindly help.

  45. Raghav says:

    Hai everyone.

    My gross income is rs 250000 (2 lakh 50 thousand). i earn rs 17000 as interest from SB accounts from multiple banks.
    THIS IS MY TOTAL INCOME FOR AN YEAR.

    SHOULD I PAY TAX. Kindly tell….

    How can i exempt myself from paying Income tax for the above mentioned income

    • Kanwaljit S.Chhabra says:

      Calculation of tax = Rs. 1700/- (10% on Rs.17000)for this fiscal. But you are entitled to Exemption of Rs.2000/-under section 87-A Since your earnings are less than Rs.500000. So, you are not liable to pay any tax. Be free.

  46. Bineet says:

    1. I got interest on ppf credited on 31 March 2013, So i will declare it in ITR of Assessment year 2013-2014, given the fact that Previous year in which this interest was credited is 2012-2013(1 April 2012-31March 2013) ??

    2. I got interest on saving account credited in my Account on 30 June 2012 and 31 Dec 2012. So i will declare it in AY 2013-2014 ?

    I am filing a revise return. Kindly help

    • Kirti says:

      Sir for PPF As the interest is credited on 31 Mar 2013 it has to be accounted in the FY 2012-12 or AY 2013-14.
      Show it under exempt Income in Interest income as explained in our article Exempt Income and Income Tax Return.
      Interest on Saving Account is tricky.
      Interest on saving bank account credited on 30 June 2012 is actually for 1 Jan 2012-30 Jun 2012.
      Interest on saving bank account credited on 31 Dec 2012 is actually for 1 Jul 2012-31 Dec 2012
      But if amount is less than 10K it’s ok.

  47. ajay says:

    how to calculate RATE OF INTEREST of recurring deposit.

    Suppose I’m investing 2500 per month in recurring deposit account for 2 years with rate of interest 8% compounded quarterly. Now I have to find out MATURITY AMOUNT. For this i will use formula :

    ACTUAL AMOUNT (MATURITY AMOUNT) = PRINCIPLE AMOUNT *( (1+RATE/100/4)^(4*2)-1)/(1-(1+RATE/100/4)^(-1/3))

    ACTUAL AMOUNT (MATURITY AMOUNT) = PRINCIPLE AMOUNT *( (1+8/100/4)^(4*2)-1)/(1-(1+8/100/4)^(-1/3))

    ACTUAL AMOUNT (MATURITY AMOUNT) = 65229/-

    ========================

    Now I want to know the FORMULA OF HOW TO CALCULATE RATE OF INTEREST.

    Suppose I’m investing 2500 per month in recurring deposit account interest compounded quarterly. My MATURITY AMOUNT IS 65229/-.
    But i don’t know what INTEREST RATE I HAVE GOT. I want to find out INTEREST RATE . WHAT FORMULA SHOULD I USE TO FIND OUT RATE OF INTEREST

    PLEASE REPLY.

  48. Mayank says:

    My Mother (housewife)has earned Saving bank interest as (Rs. 646) + FD interest as (Rs. 25459)= 26105 for FY 2012-13.No other source of income.

    1-Does she need to file ITR?
    2-Do i need to ask bank to deduct 10% tax on above?

  49. Mayank says:

    My Mother (housewife)has earned Saving bank interest as (Rs. 646) + FD interest as (Rs. 25459)= 26105 for FY 2012-13.No other source of income.

    1-Does she need to file ITR?
    2-Do i need to ask bank to deduct 10% tax on above?

  50. Mayank says:

    I earned interest from all Savings A/cs as 7000…My ITR filer has indicated ‘7000 as income from other sources and deducted 3000 from taxable income’…Is it correct? or he has to deduct 7000 from taxable income?

    • Kirti says:

      Ex : For income of Rs 6,00,000 if you have earned Rs 7000 as interest on the saving bank account which comes as income from other sources
      On Income of 6,0,7000 taxability is 52942
      On Income of 6,00,00 taxability is 51500
      So as per me it is not correct,
      You have to show 7000 as income from other sources, claim 7000 as deduction in section 80TTA so net taxable income is 600000.
      Now do you want to revise your return?

  51. Mayank says:

    I earned interest from all Savings A/cs as 7000…My ITR filer has indicated ‘7000 as income from other sources and deducted 3000 from taxable income’…Is it correct? or he has to deduct 7000 from taxable income?

    • Kirti says:

      Ex : For income of Rs 6,00,000 if you have earned Rs 7000 as interest on the saving bank account which comes as income from other sources
      On Income of 6,0,7000 taxability is 52942
      On Income of 6,00,00 taxability is 51500
      So as per me it is not correct,
      You have to show 7000 as income from other sources, claim 7000 as deduction in section 80TTA so net taxable income is 600000.
      Now do you want to revise your return?

      • Mayank says:

        That (ITR calculations) is draft and not filed yet. I shall correct the same as clarified.

        • Kirti says:

          Good to hear. Don’t delay file returns ASAP. 31 Jul 2013 is last day and avoid last minute rush(Everyone it seems wants to file on last date)

  52. jay says:

    Under 80TTA examption of rs 10000, if i have minore a/c of my child & in both my a/c & my child a/c int income is more then 10000 then exampted both or only 10000rs.

    • Kirti says:

      Under 80TTA Only 10,000 Rs of interest on Saving Bank account of which you are primary or First holder is exempt.
      (iii) Section 10(32) provides exemption to extent of Rs. 1,500/- in respect of minor’s income for the purpose of clubbing. Therefore, exclude Rs. 1,500/- from the income of the minor while clubbing the income of the minor in the respective head. However, if income of the minor is to be clubbed in various heads, total exclusion should not exceed Rs. 1,500/-.
      So in Schedule SPI, Income of specified persons(spouse, minor child etc) includable in income of the assessee(income of the minor child to be
      included after Rs. 1,500 per child)
      show under relationship MINOR CHILD Nature of Income as INTEREST INCOME and under Amount (Interest income – 1500) ex: 12000-1500.
      Show Rs 1500 in Exempt Income Section under Others, including exempt income of minor children as shown in our article Exempt Income and Income Tax Return

  53. jay says:

    Under 80TTA examption of rs 10000, if i have minore a/c of my child & in both my a/c & my child a/c int income is more then 10000 then exampted both or only 10000rs.

    • Kirti says:

      Under 80TTA Only 10,000 Rs of interest on Saving Bank account of which you are primary or First holder is exempt.
      (iii) Section 10(32) provides exemption to extent of Rs. 1,500/- in respect of minor’s income for the purpose of clubbing. Therefore, exclude Rs. 1,500/- from the income of the minor while clubbing the income of the minor in the respective head. However, if income of the minor is to be clubbed in various heads, total exclusion should not exceed Rs. 1,500/-.
      So in Schedule SPI, Income of specified persons(spouse, minor child etc) includable in income of the assessee(income of the minor child to be
      included after Rs. 1,500 per child)
      show under relationship MINOR CHILD Nature of Income as INTEREST INCOME and under Amount (Interest income – 1500) ex: 12000-1500.
      Show Rs 1500 in Exempt Income Section under Others, including exempt income of minor children as shown in our article Exempt Income and Income Tax Return

  54. Suresh Iyer says:

    Hi

    I have interest earned from Savings Account – Rs. 11,000. I had invested in Corporate FD from Shriram Transport Financial in 2010 for a 3 year cumulative FD. The interest earned in the 3 year period was Rs. 9000.

    Kindly advise on how do I treat these incomes

    • Kirti says:

      In case of company fixed deposit, the TDS limit of the interest earned is caped at Rs 5,000. The companies would deduct tax at source if the interest earned in a financial year exceeds Rs 5,000 as per the tax slab of the individual.
      Please correct me if I am wrong. NO TDS was deducted for you for Corporate FD from Shriram Transport Financial.
      Assuming no TDS was deducted
      Interest earned i.e Rs 9000 would be your income from other sources. As your interest income from Saving Bank account is more than 5000 Rs please use ITR2 and not ITR1 Our article Income From Other Sources :Saving Bank Account, Fixed Deposit,RD and ITR discusses it in detail.
      Interest in Saving Bank account : Show 10,000 in section 80TTA (Same section where 80C etc are mentioned). Add 11,000 Rs to interest portion of Income from other sources as explained in our article Interest on Saving Bank Account : Tax, 80TTA

      • vicky says:

        Hello Kirti,
        I guess there is some confusion regarding what form to fill if the savings interest income is more than 5000. Here you are saying that we should go for ITR2. I raised a query to official IT website and there response was – interest income does not come under exempt and in this case one should go for ITR1 only.

  55. Suresh Iyer says:

    Hi

    I have interest earned from Savings Account – Rs. 11,000. I had invested in Corporate FD from Shriram Transport Financial in 2010 for a 3 year cumulative FD. The interest earned in the 3 year period was Rs. 9000.

    Kindly advise on how do I treat these incomes

    • Kirti says:

      In case of company fixed deposit, the TDS limit of the interest earned is caped at Rs 5,000. The companies would deduct tax at source if the interest earned in a financial year exceeds Rs 5,000 as per the tax slab of the individual.
      Please correct me if I am wrong. NO TDS was deducted for you for Corporate FD from Shriram Transport Financial.
      Assuming no TDS was deducted
      Interest earned i.e Rs 9000 would be your income from other sources. As your interest income from Saving Bank account is more than 5000 Rs please use ITR2 and not ITR1 Our article Income From Other Sources :Saving Bank Account, Fixed Deposit,RD and ITR discusses it in detail.
      Interest in Saving Bank account : Show 10,000 in section 80TTA (Same section where 80C etc are mentioned). Add 11,000 Rs to interest portion of Income from other sources as explained in our article Interest on Saving Bank Account : Tax, 80TTA

      • vicky says:

        Hello Kirti,
        I guess there is some confusion regarding what form to fill if the savings interest income is more than 5000. Here you are saying that we should go for ITR2. I raised a query to official IT website and there response was – interest income does not come under exempt and in this case one should go for ITR1 only.

  56. Nagaraj says:

    Hi Kirti,

    I was filling ITR 2 and landed up in couple of doubts here.

    1)I have declared some amount under allowances exempt under section 10 in the sheet Part B.(HRA,Conveyance amount)
    So where should i fill the details about it .Any schedule where in we should fill that.

    2)Also what needs to be filled under Schedule EI sheet, it has some options like interest, agriculture and others.
    Shd we fill the exempt income mentioned in 1 like HRA under it this as others?

    Thanks

    • Kirti says:

      Nagraj we usually don’t show HRA in ITR1 mostly it’s accounted in Form 16.
      This year there is confusion regarding exempt income and whether HRA,Travel allowance need to be declared but there is no notification from Income Tax dept regarding how to show HRA etc. So like in earlier years most CAs are not showing HRA in ITR1
      For HRA in ITR2 you need to show HRA allowance in Schedule S Details of Income from Salary (Fields marked in RED should not be left Blank) under
      Allowances exempt under section 10
      Mostly for exempt income we have interest like : Interest on EPF,PPF,Dividends etc which need to be shown.
      We have discussed it in detail in our Exempt Income and Income Tax Return
      Hope it helps!

  57. Nagaraj says:

    Hi Kirti,

    I was filling ITR 2 and landed up in couple of doubts here.

    1)I have declared some amount under allowances exempt under section 10 in the sheet Part B.(HRA,Conveyance amount)
    So where should i fill the details about it .Any schedule where in we should fill that.

    2)Also what needs to be filled under Schedule EI sheet, it has some options like interest, agriculture and others.
    Shd we fill the exempt income mentioned in 1 like HRA under it this as others?

    Thanks

    • Kirti says:

      Nagraj we usually don’t show HRA in ITR1 mostly it’s accounted in Form 16.
      This year there is confusion regarding exempt income and whether HRA,Travel allowance need to be declared but there is no notification from Income Tax dept regarding how to show HRA etc. So like in earlier years most CAs are not showing HRA in ITR1
      For HRA in ITR2 you need to show HRA allowance in Schedule S Details of Income from Salary (Fields marked in RED should not be left Blank) under
      Allowances exempt under section 10
      Mostly for exempt income we have interest like : Interest on EPF,PPF,Dividends etc which need to be shown.
      We have discussed it in detail in our Exempt Income and Income Tax Return
      Hope it helps!

      • Nagaraj says:

        I have filled HRA and conveyance(amt adding both) under schedule S as stated by you already.
        My doubt was like in the schedule EI (Exempt income), do we need to fill HRA details again here under OTHERS.

        I saw your other post Exempt income where in you had provided screenshot of Schedule EI.I was not seeing anything related to HRA or conveyance?

  58. Kirti Azad says:

    I’ve a Auto Sweep account in SBI(Savings Plus).Total Interest for FY12-13 is Rs9832/- and TDS deducted is Rs 1088/-. Whether I can claim this interest in section 80TTA.I fall in 20% Tax slab. Interest from MOD or Auto sweep FD’s are taxexempted under 80TTa or we have to pay tax on them as per our Tax slab.

    • Kirti says:

      Kirti, after the sweep from saving bank account into Fixed Deposit that is treated as FD and hence interest from FD is taxed as per your income slab.
      Section 80TTA applies only to interest from Saving Bank account.
      Just a doubt, typically TDS is 10% of interest earned so if you have earned interest of 1088 then your interest should be 10,880.

  59. Kirti Azad says:

    I’ve a Auto Sweep account in SBI(Savings Plus).Total Interest for FY12-13 is Rs9832/- and TDS deducted is Rs 1088/-. Whether I can claim this interest in section 80TTA.I fall in 20% Tax slab. Interest from MOD or Auto sweep FD’s are taxexempted under 80TTa or we have to pay tax on them as per our Tax slab.

    • Kirti says:

      Kirti, after the sweep from saving bank account into Fixed Deposit that is treated as FD and hence interest from FD is taxed as per your income slab.
      Section 80TTA applies only to interest from Saving Bank account.
      Just a doubt, typically TDS is 10% of interest earned so if you have earned interest of 1088 then your interest should be 10,880.

  60. ASHOK KUMAR says:

    Dear Kirti,

    Do me correct one thing that its is interest on saving bank account

    • Kirti says:

      If you only have interest on saving bank account, first add it to interest income in Income form other sources and then show it as deduction under section 80TTA. As it is exempt income and above 5000 Rs use ITR2.

  61. ASHOK KUMAR says:

    Dear Kirti,

    Do me correct one thing that its is interest on saving bank account

    • Kirti says:

      If you only have interest on saving bank account, first add it to interest income in Income form other sources and then show it as deduction under section 80TTA. As it is exempt income and above 5000 Rs use ITR2.

  62. ASHOK KUMAR says:

    Dear Kirti,

    will u please clarify, if we earn interest income above rs.-5000/- which ITR we have to file

  63. ASHOK KUMAR says:

    Dear Kirti,

    will u please clarify, if we earn interest income above rs.-5000/- which ITR we have to file

  64. Nagaraj says:

    I have two questions with respect to income tax filing for this year.

    1) I have income from “Interest from saving bank account to about 2k, so I should show this in Income from other sources and deduct in 80TTA and use IRR1 itself “.Am i correct?

    2) My company provides me with HRA and conveyance allowances.Will these come under exempt income of 5k ,in which case do i need to go for ITR1 or ITR 2?I dont have any other income apart from these.

  65. Nagaraj says:

    I have two questions with respect to income tax filing for this year.

    1) I have income from “Interest from saving bank account to about 2k, so I should show this in Income from other sources and deduct in 80TTA and use IRR1 itself “.Am i correct?

    2) My company provides me with HRA and conveyance allowances.Will these come under exempt income of 5k ,in which case do i need to go for ITR1 or ITR 2?I dont have any other income apart from these.

    • Kirti says:

      Nagraj
      you are correct about Interest from saving bank account to about 2k,to be show as Interest in Income from other sources and deduction in 80TTA.
      Regarding whether due to HRA and conveyance allowance ITR1 can be used or not – still not clear.
      We feel it can be used because ITR instruction does not say so.

    • Kirti says:

      Most of people are playing safe and filling ITR2 as you can see in CACLubIndia discussion HRA exemption in ITR1 or ITR2

  66. Rachit says:

    Hello
    I have one question regarding saving a/c and RD interest…..I got around 2000 saving a/c interest and 3000 RD a/c interest should i need to show this amount in ITR form or not.

    • Kirti says:

      Yes any income earned has to be shown in income tax return form.
      Interest from Saving Bank account and RD interest come under Income from other sources. They have been explained in our article Income From Other Sources :Saving Bank Account, Fixed Deposit,RD and ITR with pictures.
      If you still have questions please ask

      • Rachit says:

        Hello
        Thanks for your reply…its clear about saving a/c but what about RD interest…..we have to show that also……

        • Kirti says:

          Thanks for asking for clarification. Realized that explanation was not complete so updated the article.
          If you have opened a Recurring Deposit or any of investment schemes in financial year for which you are filling return for example you opened in Oct 2012 ,then show it in the Income Tax Return by adding only interest earned as income from other sources. And keep on showing it.

          If you had opened a Recurring Deposit or any of investment schemes for which TDS was not deducted in earlier financial years, say Aug 2010 but has not reported any of the interest income till now then wait till the scheme attains mathttp://www.bemoneyaware.com/blog/wp-admin/edit-comments.php#comments-formurity, show it in income tax return of that year.

          So did you open Recurring Deposit this year ?

          • Rachit says:

            Hello
            Thanks again….actually me RD matured on Feb 2013…..and I got interest around 3k….. so should I show this interest in other income row….but I am still not sure because I read some where if interest less than 10k so not needed….

          • Kirti says:

            Interest less than 10k is exempt only for saving bank account. From whatever little we know we would suggest you to show interest income as income from other sources and pay tax on it.
            If you have link to where you read if interest less than 10k so not needed pass it on, we shall try to understand it

  67. Rachit says:

    Hello
    I have one question regarding saving a/c and RD interest…..I got around 2000 saving a/c interest and 3000 RD a/c interest should i need to show this amount in ITR form or not.

    • Kirti says:

      Yes any income earned has to be shown in income tax return form.
      Interest from Saving Bank account and RD interest come under Income from other sources. They have been explained in our article Income From Other Sources :Saving Bank Account, Fixed Deposit,RD and ITR with pictures.
      If you still have questions please ask

      • Rachit says:

        Hello
        Thanks for your reply…its clear about saving a/c but what about RD interest…..we have to show that also……

        • Kirti says:

          Thanks for asking for clarification. Realized that explanation was not complete so updated the article.
          If you have opened a Recurring Deposit or any of investment schemes in financial year for which you are filling return for example you opened in Oct 2012 ,then show it in the Income Tax Return by adding only interest earned as income from other sources. And keep on showing it.

          If you had opened a Recurring Deposit or any of investment schemes for which TDS was not deducted in earlier financial years, say Aug 2010 but has not reported any of the interest income till now then wait till the scheme attains mathttp://www.bemoneyaware.com/blog/wp-admin/edit-comments.php#comments-formurity, show it in income tax return of that year.

          So did you open Recurring Deposit this year ?

          • Rachit says:

            Hello
            Thanks again….actually me RD matured on Feb 2013…..and I got interest around 3k….. so should I show this interest in other income row….but I am still not sure because I read some where if interest less than 10k so not needed….

          • Kirti says:

            Interest less than 10k is exempt only for saving bank account. From whatever little we know we would suggest you to show interest income as income from other sources and pay tax on it.
            If you have link to where you read if interest less than 10k so not needed pass it on, we shall try to understand it

  68. Chirag says:

    Is the interest income garnered from the Postal MIS (Monthly Income Scheme) treated as a ‘term deposit’ or can I claim the amount under 80TTA?
    Am a little confused on how to treat the interest from the MIS. 🙁

    • Kirti says:

      Post Office Monthly Income Scheme (MIS) is meant for investors who want to invest a sum amount initially and earn interest on a monthly basis for their livelihood.
      This does not come under sec 80C so there is no tax-exemption for the amount you invest in this, and interest income is taxable, but there is no TDS cut in this scheme.
      Only interest from Saving Bank Account can be claimed in section 80TTA not even Fixed Deposit, or Recurring deposit etc

  69. Chirag says:

    Is the interest income garnered from the Postal MIS (Monthly Income Scheme) treated as a ‘term deposit’ or can I claim the amount under 80TTA?
    Am a little confused on how to treat the interest from the MIS. 🙁

    • Kirti says:

      Post Office Monthly Income Scheme (MIS) is meant for investors who want to invest a sum amount initially and earn interest on a monthly basis for their livelihood.
      This does not come under sec 80C so there is no tax-exemption for the amount you invest in this, and interest income is taxable, but there is no TDS cut in this scheme.
      Only interest from Saving Bank Account can be claimed in section 80TTA not even Fixed Deposit, or Recurring deposit etc

  70. Vaibhav says:

    Hello,

    Thanks for this useful info. One small question – while filing IT returns, where do I mention this plain savings bank account interest (Income from other sources or exempt income)?

    Regards,
    -Vaibhav

    • Kirti says:

      Thanks for asking Vaibhav, we had forgotten to mention it. We have added answer in the article above.

      • Vaibhav says:

        Hey thanks for the reply, Kirti.

        Can you also tell me where do I specify this interest income as ‘other income’ in ITR2?

        I didn’t find any such field ‘Income from other sources’ like that of in ITR1. I’m assuming this specified ‘other income’ will then be compensated against the one that I’ll be specifying in VIA schedule to avail 80tta deduction?

        Can you please clarify?

        Regards,
        -Vaibhav

        • Kirti says:

          Vaibhav we have written an article Income from other sources to explain it .
          If your interest from all your saving bank account is more than 10,000 Rs under section 80TTA show 10,000 and remaining add it to your other Income from other sources. If your interest all your from saving bank account is less than 10,000 say 7000 then show 7000 in 80TTA only.

  71. Vaibhav says:

    Hello,

    Thanks for this useful info. One small question – while filing IT returns, where do I mention this plain savings bank account interest (Income from other sources or exempt income)?

    Regards,
    -Vaibhav

    • Kirti says:

      Thanks for asking Vaibhav, we had forgotten to mention it. We have added answer in the article above.

      • Vaibhav says:

        Hey thanks for the reply, Kirti.

        Can you also tell me where do I specify this interest income as ‘other income’ in ITR2?

        I didn’t find any such field ‘Income from other sources’ like that of in ITR1. I’m assuming this specified ‘other income’ will then be compensated against the one that I’ll be specifying in VIA schedule to avail 80tta deduction?

        Can you please clarify?

        Regards,
        -Vaibhav

        • Kirti says:

          Vaibhav we have written an article Income from other sources to explain it .
          If your interest from all your saving bank account is more than 10,000 Rs under section 80TTA show 10,000 and remaining add it to your other Income from other sources. If your interest all your from saving bank account is less than 10,000 say 7000 then show 7000 in 80TTA only.

  72. Gopinath says:

    I still didnt understand. Please elaborate with example.
    Lets say

    a) Bank has deducted 4000/- (ie. 10% of FD interest – 40000) but
    my tax slab is 20%.
    b) Bank has not deducted any tax on Saving A.c interest – Rs.30000/-

    What all sections and amounts I should show in e-return .
    Is there any extra tax I have to pay.

    • Kirti says:

      Gopinath the article is about Income on Saving Bank Account and not Fixed Deposit.
      Most of the banks are paying interest of 4% pm (Yes and Kotak are paying around 6%)on daily basis which is credited twice a month in your bank account without any Tax deducted or TDS
      For FD bank will deduct TDS if interest income in FY is more than 10,000. The interest income on FD comes under the head Income from other sources and is added to total income and taxed according to income slab. So if you are in 20% slab you would have to pay tax(10% + education cess) on the Interest from FD.

      In e return TDS on Interest from FD is shown in Income from other sources part and you need to pay self assessment tax
      These links will be helpful to you:
      How to Calculate Income Tax : On understanding different kinds of income
      Filling ITR-1 : Bank Details, Exempt Income, TDS Details
      Fixed Deposits and Tax

  73. Gopinath says:

    I still didnt understand. Please elaborate with example.
    Lets say

    a) Bank has deducted 4000/- (ie. 10% of FD interest – 40000) but
    my tax slab is 20%.
    b) Bank has not deducted any tax on Saving A.c interest – Rs.30000/-

    What all sections and amounts I should show in e-return .
    Is there any extra tax I have to pay.

    • Kirti says:

      Gopinath the article is about Income on Saving Bank Account and not Fixed Deposit.
      Most of the banks are paying interest of 4% pm (Yes and Kotak are paying around 6%)on daily basis which is credited twice a month in your bank account without any Tax deducted or TDS
      For FD bank will deduct TDS if interest income in FY is more than 10,000. The interest income on FD comes under the head Income from other sources and is added to total income and taxed according to income slab. So if you are in 20% slab you would have to pay tax(10% + education cess) on the Interest from FD.

      In e return TDS on Interest from FD is shown in Income from other sources part and you need to pay self assessment tax
      These links will be helpful to you:
      How to Calculate Income Tax : On understanding different kinds of income
      Filling ITR-1 : Bank Details, Exempt Income, TDS Details
      Fixed Deposits and Tax

  74. ABHISHEK AGARWAL says:

    can i take the deduction of auto sweep interest under U/s TTA or not..

    thanking you

    • Kirti says:

      Interest income from auto sweep is considered as Income from FD so you need to treat it as Income from Other sources.
      It does not come under Sec 80TTA which is for plain saving bank account.

  75. ABHISHEK AGARWAL says:

    can i take the deduction of auto sweep interest under U/s TTA or not..

    thanking you

    • Kirti says:

      Interest income from auto sweep is considered as Income from FD so you need to treat it as Income from Other sources.
      It does not come under Sec 80TTA which is for plain saving bank account.

  76. Sunil says:

    Dear Be Money Aware,

    Would this mean the amount that is Auto Swept into FD will also be considered as Svaings Bank Interest (Since there is no particualr lock on the FD). Or it will be taxed as per one’s tax slabs.

    Please clarify.

    • Kirti says:

      Sunil a very good question. If you can tell us which bank Autosweep facility you use we will be able to throw more light on it.
      In General terms :
      Auto sweep accounts have two parts :
      1. Saving bank account.
      2. FD part.
      Interest on Saving bank account is treated like normal bank interest ,what is covered here.
      FD interest is added to you income for the year and taxed accordingly

      How does the auto sweep facility work?
      You decide the maximum amount that you want in your account. This is also called the threshold limit.
      You decide the amount for which the FDs need to be created.
      You decide the tenure of these FDs. The interest rate offered on these auto sweep FDs is the same as the rate offered on regular FDs of that duration.

      Whenever the amount in your account becomes more than the sum of the maximum amount you specified (point 1 above) and the FD amount (point 2), an FD is created for the specified amount and the specified tenure (in point 3). (This is called Sweep-in)

      If the amount that you want to withdraw is more than the amount in your account, one of the FDs would be broken immediately (this happens automatically), and you would get the money. (This is called Sweep-out or reverse-sweep)
      Which FD is broken and penalty charged depends on bank policy. Some banks follow the FILO (First In Last Out), . Thus, if an FD has to be broken to provide for a withdrawal, the most recent FD is broken first. some banks follow First in First Out (FIFO) some LIFO(Last in First Out) approach for breaking the FDs

  77. Sunil says:

    Dear Be Money Aware,

    Would this mean the amount that is Auto Swept into FD will also be considered as Svaings Bank Interest (Since there is no particualr lock on the FD). Or it will be taxed as per one’s tax slabs.

    Please clarify.

    • Kirti says:

      Sunil a very good question. If you can tell us which bank Autosweep facility you use we will be able to throw more light on it.
      In General terms :
      Auto sweep accounts have two parts :
      1. Saving bank account.
      2. FD part.
      Interest on Saving bank account is treated like normal bank interest ,what is covered here.
      FD interest is added to you income for the year and taxed accordingly

      How does the auto sweep facility work?
      You decide the maximum amount that you want in your account. This is also called the threshold limit.
      You decide the amount for which the FDs need to be created.
      You decide the tenure of these FDs. The interest rate offered on these auto sweep FDs is the same as the rate offered on regular FDs of that duration.

      Whenever the amount in your account becomes more than the sum of the maximum amount you specified (point 1 above) and the FD amount (point 2), an FD is created for the specified amount and the specified tenure (in point 3). (This is called Sweep-in)

      If the amount that you want to withdraw is more than the amount in your account, one of the FDs would be broken immediately (this happens automatically), and you would get the money. (This is called Sweep-out or reverse-sweep)
      Which FD is broken and penalty charged depends on bank policy. Some banks follow the FILO (First In Last Out), . Thus, if an FD has to be broken to provide for a withdrawal, the most recent FD is broken first. some banks follow First in First Out (FIFO) some LIFO(Last in First Out) approach for breaking the FDs

  78. My Bank always request me to keep big amounts in Term Deposits so that I can earn more interest.I now understand how interest on the amounts in SB a/c is calculated. Thanks for the info.

    • Kirti says:

      Thanks Easwar you are welcome anytime. Yes keeping in Term deposits is a good idea, a safe no risk idea and earns more interest 🙂
      But each kind of investment has a purpose in life.Saving Bank Account is used to meet daily needs nd emergency funds because of good liquidity.
      Term deposits should be part of one’s investment plan

  79. My Bank always request me to keep big amounts in Term Deposits so that I can earn more interest.I now understand how interest on the amounts in SB a/c is calculated. Thanks for the info.

    • Kirti says:

      Thanks Easwar you are welcome anytime. Yes keeping in Term deposits is a good idea, a safe no risk idea and earns more interest 🙂
      But each kind of investment has a purpose in life.Saving Bank Account is used to meet daily needs nd emergency funds because of good liquidity.
      Term deposits should be part of one’s investment plan

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