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Interest on auto sweep account

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Ari Narayanan K

22 Points Posted on 12 August 2020

I am having saving deposit account with auto sweep facility. can you clarify the interest earned on auto sweep deposit will be shown under savings interes earned or fd interest earned in IT return.

Replies (2)

Quick Summary

This discussion clarifies how interest earned on an auto-sweep savings account is treated for tax purposes. It confirms that interest from auto-sweep deposits is considered Fixed Deposit (FD) interest, not savings account interest. This distinction is important for tax returns, especially for senior citizens who can claim deductions under Section 80TTB for FD interest.

Sagar Patel

Tax and Business Consultant

11616 Points Posted on 12 August 2020

Auto sweep deposit is considered as Fixed/time deposit, So, interest earned on same is not considered as interest from saving account, but it's considered as FD interest.
Senior citizens can claim deduction u/s 80TTB for interest on FD.