TDS-194A Tax deducted by Bank at10%, Shall be this part of Taxable income?

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Respected TAX Expert,

Employee had taxable income and TAX deducted at source from Salary at applicable rates. (>5L & <10L). has both 5% and 20% slabs under OLD regime.

Employee also had 194A interest on deposits and tax deposited by Bank(s) at 10%. appearing this income and tax details both in AIS & 26AS (about 98000/- and tax is 9795/-)

Now  while filing ITR-1, is the differential 10% tax to be paid on 194A amounts received as it is showing in ITR-1 online as tax due.. since the overall income both salary + 194A is combined in ITR-1. Please help to clarify.

I was under impression for Interest on Deposits (other than securities). .the tax rate is fixed to 10%, while for interest on Savings accounts will be as per the applicable slab of the taxpayer. Please correct my understanding.

 Regards

Venkat.

Replies (3)

Interest on sav acc can be claimed as exempt u/s. 80TTA or 80TTB, which ever applicable; but for FD interest it is to be declared under head IFOS which is taxed as per slab rate. You can claim TDS deducted against total tax liability.

In short, if you are under 20% slab, additional tax liability of 10% will arise in such case.

Thanks a ton DhirajlalJi,

It's clear. that means in this specific case employee since has not projected/visualized the tax liability arising out of Interest on FDs at higher slab.. makes compliant making the differential tax liability while filing the ITR-1. Thanks Sir again.

Correct.

Most welcome..        

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