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If interest on fd is the only income,what it rule says

jraju (Others) (283 Points)

04 July 2015

Hi,

If a pan number holder only has the interest on FD as souce of income. What does the ITrules say. Now, opening of FD, and filing of 15 g requires one to have the Pan.

But if he only has that as the source of income what IT says. Moreover ,should he has to pay the tax on FD for total amount of interest accrued

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6 Replies

(Guest)

That depends on the amount of FD interest. If it crosses, minimum amt naot taxable(i.e. Rs 250000/-), then he should file return. Even if the bank deducts TDs on the entire amount of interet you can claim refund.

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jraju (Others) (283 Points)
Replied 04 July 2015

Hi,

I learnt that interest on Deposit, does not have any exemption, whether bank deducts or 15 g filed. It only means that instead of bank taking the responsibility, the individual has to take the responsibility.

If that be the case, is it to be taken to mean that one need not worry about the interest if it is less than 250000, if the source is only interest on FD. Pl clear

(Guest)

Yes. The bank will deduct TDs if the interest >10000/-

If they have accepted form 15G, they will not deduct TDS, and if interest is <250000/- per year, it being the only source of income, you need not file ITR

jraju (Others) (283 Points)
Replied 04 July 2015

Hi, Thanks for the reply. could you give a link on IT rules to this reply.

Moreover, Pl confirm that Bank would deduct if the interest is more than 10000. I think that there is no exemption at all in case of interest on FD. The interest of 10000 is only eligible on interest on Savings Account.

(Guest)

Section 194A(1) read with section 194A(3)(i) of the Act provide for deduction of tax on interest (other than interest on securities) over a specified threshold, i.e. Rs.10,000 for interest payment by banks, co-operative society engaged in banking business (co-operative bank) and post office and Rs.5,000 for payment of interest by other persons.

you are confusing 80TTA (deduction for savings interest max 10000) with TDS deduction by banks.

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jraju (Others) (283 Points)
Replied 27 August 2015

Hi, sorry for the late reply.

But recently also i came across an article, where the persons are having doubts and what is the actual clarification. If i could i would give the link of times of india article, which says, that no interest is eligible for tax exemption, under i t act.. The 10000 Rs. exemption is for savings account interest only. Would you clarify