Interest expense for earning interest from bank

If you've paid interest on a loan taken specifically to invest in a bank fixed deposit, you may be able to claim this interest as a deduction under Section 57(iii) of the Income Tax Act, 1961. While the new income tax portal's ITR 1 form doesn't offer a direct option for this deduction, you can report the net income. For a separate deduction claim, consider using ITR 2, which provides a dedicated section for 'Income from Other Sources' deductions.