Taxabilty of bank interest

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Siddharth (Querist)
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26 September 2011 bank interest on savings bank account is now taxable since section 80L has been abolished...is there any limit for the same say 5000 or 10000 or it is taxable from the very first rupee.?
And as of now the salaried employees having five lacs as income but savings bank interest exceeding ten thousand are required to furnish return of income. Do the previous question and this question relate anywhere or not? A detailed explanation would solve the purpose

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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26 September 2011 Firstly, taxability and filing of return of income are 2 separate things.

Bank interest is taxable under the head Income from Other Sources. There is no exemption available and it is the whole amount is taxable.

As far as exemption from filing return of income is concerned, the provisions are as follows:

1. Available only to a salaried person.
2. Total income does not exceed Rs. 5 lakhs
3. Interest from saving account does not exceed Rs. 10,000/-.
4. He has declared the interest to his employer, who has deducted TDS thereon.
5. Has no claim of refund.
6. Has income only from one employer.

The above exemption notification does not mean that bank interest upto Rs. 10,000/- is exempt from tax.

Siddharth

Siddharth (Querist)
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28 September 2011 well then the notification means...that the interest is taxable under other sources..filing or not filing return depends on the income to touch 5 lacs as the case may be, and if TDS has been deducted in the same case, then he has to file or not?

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