I am a salaried person and filing my IT return by self online.
I have a question about Bank Interest income. As per IT upto 10,000/- Rs Bank Interest is tax free. If the interest is more than 10,000/- Shall i have to file the return by deducting 10,000/- Rs from Total interest (sum of all bank accounts interest) or shall i show total amount and system will calculate?
Please guide for my querry.
Asked 3 years ago in Income Tax from Ahmedabad, Gujarat
In case of Bank Savings Bank Interest first you need to show the full amount of interest in income from other sources and from the gross total income you need to deduct Rs.10000 u/s. 80TTA to arrive at Total Income
You need to show total amount of interest received under IFOS and than deduct Rs. 10,000/- under deduction under section 80TTA
You need to show the entire amount of Bank Interest under the head Income from Other sources and the deduction available to the extent of Rs. 10000/- to be claimed under section 80TTA under Chapter VI A Deductions.
For example, if your Bank interest is Rs. 11500/-, the entire amount to be included in as Interest Income in Income from other sources and deduction under 80 TTA to be claimed to the extent of Rs. 10000/-.
Also kindly note that deduction is available only for Savings Bank (SB) Account interest and not Bank Fixed Deposit Interest.
You are firstly required to add total Interest income In your Income under the head other sources.
Thereafter, you can claim deduction of Rs 10,000 under section 80TTA under the head of Deductions.
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Whatever be the interest amount, you need to include it in the gross total income. If you are using software,the system will automatically calculate the deduction as applicable.
It is not true that bank interest is exempt under Income Tax Act,
only interest on savings bank account is exempt u/s 80TTA and interest on FDR and Recurring account is taxable. You will have to show interest earned on s b account and FDRS separately and claim deduction u/s 80TTA in chapter VIA deduction and furnish your return.
Section 80TTA of the Income tax allows a deduction up to Rs 10000/- in computing the income . So you should show the full amount and the claim the deduction of Rs 10000 in the system .
Then you will get the relief .