06 July 2011
A client of mine has TDS on his income from salaries. He has interest income from FDs for which TDS was deducted by the bank @10%. However he falls in the tax bracket of >500000. While filing the tax return will his total tax liability increase as his taxable income will increase by the amount of interest on FDs.
07 July 2011
WHILE FILING ITR OF HIS INCOME, HE HAS TO RECOMPUTE TAX ON HIS INCOME INCLUDING SALARY AND FDR INTEREST. HE HAS TO PAY TAXES WITH INTEREST ON TAX after giving credit of TDS on salary and TDS on FDR.
07 July 2011
As per the Income Tax act there is no separate tax for salary or Interest. In fact the tax is payable on total income. If he has not disclosed the other income then he has to pay tax on other income i.e interest and he shall also be liable for payment of interest u/s 234A, B & C if the default is there for payment of taxes.
So the income of salary as increased by the Interest (Gross) is to be taken into account and then tax is to be calculated from that TDS is to be deducted and Interest as the case may be is to be applied u/s 234A, B & Co. The final sum is to be paid as self assessment tax.
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