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Income tax on SB a/c interest (Income Tax)

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This query is : Resolved


( Author )
31 July 2008

Hi,

Do I have to pay income tax on interest received on savings bank account?

Thanks,
Abhishek


Jitender

( Expert )
31 July 2008

yes
it is income u/h other sources.


CA Abhishek Tyagi

( Expert )
01 August 2008

yes the same is to be taxes undet the head "Income from other sources". & everybody who has earned this income, must show this in the return of income.


Abhishek Kumar Srivastava

( Author )
01 August 2008

Hi,

Thanks for clarifying this. How do I pay tax on savings bank a/c interest? Does it come under advance tax?

Thanks,
Abhishek


S.Srinivasaraghavan

( Expert )
01 August 2008

This also comes within the purview of advance tax.


Abhishek Kumar Srivastava

( Author )
01 August 2008

Hi,

If I understand correctly then one needs to pay advance tax on estimated income and if they fail to do that and have such tax liability then they have to pay interest under section 234B and 234C.

Is my understanding correct? How can I make an estimate of my income from savings bank account?

Thanks,
Abhishek


S.Srinivasaraghavan

( Expert )
01 August 2008

How you will estimate interest on SB a/c is based on how much you estimate to keep in SB a/c on an average!


Abhishek Kumar Srivastava

( Author )
01 August 2008

OK.

Is there a calculator available that can help me in calculating an estimate of return from savings account? can you share that with me?

Also, can you tell me what is the current rate of interest on savings bank account? What happens if this rate changes in between and that effects my advance tax calculations?

What is the best way out of all these problems?


Abhishek Kumar Srivastava

( Author )
01 August 2008


OK.

Is there a calculator available that can help me in calculating an estimate of return from savings account? can you share that with me?

Also, can you tell me what is the current rate of interest on savings bank account? What happens if this rate changes in between and that effects my advance tax calculations?

What is the best way out of all these problems?


S.Srinivasaraghavan

( Expert )
01 August 2008

1)No, I do not have.
2)4%
3)If the rate changes on account of which there is fluctuation, you can explain at the time of hearing.


Abhishek Kumar Srivastava

( Author )
01 August 2008

OK. Can you explain me how to calculate interest on SB? Please take an example of min balance between 10th and 30th/31st being Rs. 1000/- every month.


Abhishek Kumar Srivastava

( Author )
01 August 2008

OK. Can you explain me how to calculate interest on SB? Please take an example of min balance between 10th and 30th/31st being Rs. 1000/- every month.


S.Srinivasaraghavan

( Expert )
01 August 2008

The rule of banker's also play a role in calculations. If you approach your banker they will give you the working with the methodology.


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