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Bank interest

Rohit Kumar (Manager) (30 Points)

08 October 2011

Dear All,

Do i need to show bank interest on my fixed deposits in my my return. If yes, where to show that.

Secondly ,bank has deducted TDS on those deposits and has issued Form 16 A to me. Do i need to pay tax again on that interest by clubbing it with my salary income. Pls clarify. Thanks

Rohit Kumar

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12 Replies

ashish gupta ( student) (1922 Points)
Replied 08 October 2011

yes you have to show interest on fixed deposit in your income tax return under the head income from other sources.

you dont have to pay extra tax just compute the total tax liability including this interest with your salary income and ajust the TDS deducted by bank.

CA RICHA BADALIA (CA,CS) (1682 Points)
Replied 08 October 2011

Firstly you have to show bank interest under income from other source.

Secondly you have to calculate your total tax liability(ie salary , bank interest etc) after that you have to deduct the TDS paid by you from the liability ,the balance will be the net tax payable by you.If TDS is more then your tax payable then you can claim refund of excess payment.

Rohit Kumar (Manager) (30 Points)
Replied 08 October 2011

Originally posted by : CA RICHA BOTHRA

Firstly you have to show bank interest under income from other source.

Secondly you have to calculate your total tax liability(ie salary , bank interest etc) after that you have to deduct the TDS paid by you from the liability ,the balance will be the net tax payable by you.If TDS is more then your tax payable then you can claim refund of excess payment.

Thanks for the reply. Again i have a query. Bank is deducting tds on interest accrued @ 10% flat. Example i have Rs 100,000/- fd with bank. Bank gives interest @ 10% per annum after deducting tds @ 10% on interest. Therefore net interest would be Rs 10,000-Rs 1,000= Rs 9,000. By adding Rs 9,000 in income from other sources, my net income reaches the Rs 3,09,000(Income from salary Rs 300,000). So do i need to pay taxes on Rs 3,09,000 as per income tax slabs. Pls advice.

Rohit Kumar (Manager) (30 Points)
Replied 08 October 2011

Thanks for the reply. Again i have a query. Bank is deducting tds on interest accrued @ 10% flat. Example i have Rs. 100,000/- fd with bank. Bank gives interest @ 10% per annum after deducting tds @ 10% on interest. Therefore net interest would be Rs. 10,000-Rs 1,000= Rs. 9,000. By adding Rs. 9,000 in income from other sources, my net income reaches the Rs. 3,09,000(Income from salary Rs. 300,000). So do i need to pay taxes on Rs. 3,09,000 as per income tax slabs. Pls advice.

CA RICHA BADALIA (CA,CS) (1682 Points)
Replied 08 October 2011

You have to calculate tax on Rs. 310000 and not on Rs. 309000 as per the slabe rate.From the tax liability deduct the TDS paid by you.The resultanf figure will be net tax payble by you or refund.

ACMA Obulirajan R (M.Com, ACMA) (1119 Points)
Replied 08 October 2011

On gross income you have to deduct sec 10, 80c and other investment details. You will get the net taxable income. Calculate the income tax as per the slab and deduct the tds already deducted from your salary. You need to pay only the balance tax.

NAVEEN GARG (CA-FINAL) (104 Points)
Replied 08 October 2011

Agreed with CA Richa Bothra

surender (Manager Accounts) (149 Points)
Replied 08 October 2011

Yes agree with Richa your total income will be 310000 .(Income from salary 300000, Income from other sources 10000)TDS Rs 1000 should be deducted from the tax liability if you have . otherwise it will Refund.

CA PRAVEEN SINGH (MANAGER ACCOUNTS) (2277 Points)
Replied 08 October 2011

Firstly you have to show bank interest under income from other source.

You have to calculate tax on Rs. 310000 and not on Rs. 309000 as per the slabe rate.From the tax liability deduct the TDS paid by you.The resultanf figure will be net tax payble by you or refund.

RIGHT RICHA......

JMD (STUDENT) (563 Points)
Replied 09 October 2011

whether Barclay Bank PLC is a scheduled bank or an NBFC, becoz if it is NBFC then a prop. firm is required to deduct TDS on interest amt on a loan from the same

Swapnil Jain (Finance - FP&A) (564 Points)
Replied 09 October 2011

Originally posted by : CA RICHA BOTHRA
	Firstly you have to show bank interest under income from other source. Secondly you have to calculate your total tax liability(ie salary , bank interest etc) after that you have to deduct the TDS paid by you from the liability ,the balance will be the net tax payable by you.If TDS is more then your tax payable then you can claim refund of excess payment.