Tax on Interest from Savings Account
Seth (M) (148 Points)
21 June 2011Seth (M) (148 Points)
21 June 2011
Dipjyoti Majumdar
(CA in service & CS. dipmaj@ rediffmail.com )
(3468 Points)
Replied 21 June 2011
savings bank account interest is very much taxable. Tax should have been deducted. The pity is no body would like to penalise the banks. Look, they except very few, never issue TDS certifiactes in time.
U S Sharma
(glidor@gmail.com)
(21063 Points)
Replied 21 June 2011
Interest on BANK DEPOSITS is liable for TDS, though savings bank interest is taxable, but bank does not deduct tax on it.
@*CS Siddharth Bumb. *
(B.Com, CA Final, CS )
(5270 Points)
Replied 21 June 2011
bank is liable to deduct tax..
CA. Roopali Kadam
(Jobs on assignment basis.)
(1459 Points)
Replied 21 June 2011
ref pt 4(d) The new provisions are not applicable to interest on savings bank accounts.
Shouvik Chakraborty
(B.COM CA FINAL ACCOUNTS EXECUTIVE)
(120 Points)
Replied 21 June 2011
TDS must be deducted by bank u/s 194A.
On thing I would like to tel you Mr. Seth, if u r earning interest on savings bank account for more than Rs.20,000 p.a.. u can invest the excess amount in any FD where u can get a high interest.U r blocking your own money man.
Seth
(M)
(148 Points)
Replied 21 June 2011
Thanks to all of you for sharing your responses.
Shouvik - that is my trading account, so I need to keep that money in savings acc for liquidity in trading.
Thanks for all the details.!
KIYOSH
(TAX CONSULTANT)
(332 Points)
Replied 21 June 2011
TDS IS NOT APPLICABLE IN SAVING & RECURRING ACCOUNT INTEREST
Shouvik Chakraborty
(B.COM CA FINAL ACCOUNTS EXECUTIVE)
(120 Points)
Replied 21 June 2011
Are you sure Mr. Kiyosh??? Please give the details with reasons.
Manoj BG
(Tax Professional and in Service)
(1795 Points)
Replied 21 June 2011
It has clearly mentioned under section 194A (3) (viii) that TDS would not be applicable on bank depoists other than time deposits. Following is text of that provision :
(3) The provisions of sub-section (1) shall not apply—
[(vii) to such income credited or paid in respect of deposits (other than time deposits made on or after the 1st day of July, 1995) with a banking company to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in section 51 of that Act)
Since Saving bank interest is a demand deposits (and not the time deposit) as per banking regulation act, 1949, it is very much clear from the provision that there is no need to deduct TDS on Saving Bank interest.
Thanks and Regards,
Manoj B. Gavali
Seth
(M)
(148 Points)
Replied 21 June 2011
Now I'm a bit confused....from the responses of Mr. Kiyosh and Mr. Gavali..
Are you referring to only the bank action of NOt deducting the TDS??? i.e. the banks are correct in not deducting the TDS???
Or do you mean that interest earned on savings account is not taxable, so I'm not required to pay any tax on that??
Please let me know
Ankit Manek
(Chartered Accountant)
(21 Points)
Replied 21 June 2011
Agree with Mr. Manoj. Simply speaking banks are not liable to deduct tax, however such income i.e. SB Interest is taxable.
Ankur Chheda
(c)
(32 Points)
Replied 21 June 2011
TDS IS NOT TO BE DEDUCTED ON INTEREST PAID TO SAVINGS BANK A/C HOLDERS.
AS IT IS ITS NOT YOUR LIABILITY TO DEDUCT TDS AND ITS BANK'S LIABILITY.
SO IN SUCH CASE YOU ARE NOT A DEFAULTER.
REGARDS
ANKUR CHHEDA
ADVOCATE
9322254845
prakash
(article)
(222 Points)
Replied 22 June 2011
TDS SHOULD HAVE BEEN DEDUCTED ,INTEREST EXCEEDING RS 20.000 IF TDS IS NOT DEDCTED THE DEFAULTER IS BANK NOT THE ASSESSEE
Gulshan Kumar
(Professional Accountant)
(119 Points)
Replied 22 June 2011
U/s 194A interest on securities tds will deduct if interest amount more than 10000/-
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Survey, Search and Seizure under Income Tax Act 1961