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Taxability of short duration fd created in saving a/c

Nitesh Kumar Sharma (Student) (136 Points)

30 July 2014

Hello friends....

I know that upto 10000/- interest from savings a/c is exempt. BUT I want to ask you whether this 10000/- will include Interest received on monthly FD (Short Term TDR in sbi a/c) created in savings a/c.

thanks

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3 Replies

Anubhav (Chartered Accountant) (429 Points)
Replied 30 July 2014

Term Deposit Reciepts are specifically kept out of the perview of Sec 80TTA. Hence this income will be taxable.

AJH & CO

9868729930

Anubhav (Chartered Accountant) (429 Points)
Replied 30 July 2014

Term Deposit Reciepts are specifically kept out of the perview of Sec 80TTA. Hence this income will be taxable.

AJH & CO

9868729930

Manoj Sadaria (Practicing Professional) (253 Points)
Replied 30 July 2014

As per Section 80TTA, interest from savings bank account up to Rs 10,000/- is exempt from tax. Interest from Fixed (Term) Deposits is excluded from section 80TTA.

Extract of the Income Tax Act, 1961

Section 80TTA Deduction in respect of interest on deposits in savings account

(1) Where the gross total income of an assessee, being an individual or a Hindu undivided family, includes any income by way of interest on deposits (not being time deposits) in a savings account with—

a banking company to which the Banking Regulation Act, 1949 (10 of 1949), applies (including any bank or banking institution referred to in section 51 of that Act);
a co-operative society engaged in carrying on the business of banking (including a co-operative land mortgage bank or a co-operative land development bank); or
a Post Office as defined in clause (k) of section 2 of the Indian Post Office Act, 1898 (6 of 1898),

there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee a deduction as specified hereunder, namely:—

in a case where the amount of such income does not exceed in the aggregate ten thousand rupees, the whole of such amount; and
in any other case, ten thousand rupees.

Explanation.—For the purposes of this section, "time deposits" means the deposits repayable on expiry of fixed periods.

Regards

Manoj Sadaria