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Tax on saving account interest

VIJPS (manager) (95 Points)

06 July 2011

Hi ,

Last finance year 2010-11 , i recevied approx 5250 as interest on my saving account. apart from my salary.

Should I need to pay tax on saving interest recevied from bank in last finance year ?

Thanks in advance .

vikas kakkar

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21 Replies

CA ADITYA SHARMA (CA IN PRACTICE ) (16719 Points)
Replied 06 July 2011

yes interest is taxable under the head other sources

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praveen (Chartered Accountant) (6971 Points)
Replied 06 July 2011

Yes you will have to pay taxes on that also.

valji (Accounts manager-MBA) (2150 Points)
Replied 06 July 2011

YES INTEREST IS TAXABLE

CA Jignesh Kotak (CA) (86 Points)
Replied 06 July 2011

iNTEREST IS TAXABLE UNDER THE HEAD OTHER SOURCES

RONAK DARJI (CA FINAL) (382 Points)
Replied 06 July 2011

Dear Member,

Basically interest is Chargeable under the head Income From Other Source.

So, INTEREST IS TAXABLE UNDER THE HEAD OTHER SOURCES.

Regards,

Ronak Darji

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JINESH SHAH (PRACTICING CA) (151 Points)
Replied 06 July 2011

Originally posted by : CA Jignesh Kotak
	iNTEREST IS TAXABLE UNDER THE HEAD OTHER SOURCES

VIJPS (manager) (95 Points)
Replied 06 July 2011

Thanks to all of your for prompt response

A K Jain (Service) (160 Points)
Replied 06 July 2011

I also know that it is taxable but I have three replies of Account Managers of one Private Bank ,stating "Interest earned thru saving & RD a/cs are non taxable".Even I had mentioned that I will refer your reply to Income Tax deptt.

How to deal with these fellows who are misleading the customers?

Pulkesh Mehta (Chartered Accountant) (243 Points)
Replied 06 July 2011

It is included under head OS,but if ur total income does not exceeed basic adhoc limit-Rs.160000/-,than no liability of tax on you will arises..

M. N. JHA (CA) (8316 Points)
Replied 06 July 2011

Originally posted by : Aditya(future ca)
	yes interest is taxable under the head other sources

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CA Rakesh Garg (Asst. MGR Taxation) (510 Points)
Replied 07 July 2011

yes interest is taxable under the head other sources

1 Like

U S Sharma (glidor@gmail.com) (21063 Points)
Replied 07 July 2011

@ A K Jain

Sir, do you think banker is ITO or are aware of whole incometaxn laws? if yes then why they have seperate audit and finance management department? I have seen frequently that at the time of AIR filing, the headoffice depute some person who is aware of AIR formalities and he makes the sheet and takes to headoffice for onward filing of same.

Bank branch has loads of their own work, from cash management to clearing and mainly book keeping of thousands of account holders, they dont tax their brains on incometax/ servicetax and other issues where they have no role except the banking interfare.(TDS is their part to deduct so they have got classes for same) several places they have deducted TDS on trust deposits also, which is wholly exempt, they have no clarification in hand.

for the relation between banker and depositor / account holder, the reply is 100% correct, that incometax chapter does not come in focus for "savings and RD" but only in term ( time) deposits, as they have to deduct TDS on it, for balance, they dont peek in your gross taxable income, neither they are aware about the profession businss or callings of the depositor / account holder, so how they can comment on that part?

deepak kumar srivastava (na) (281 Points)
Replied 07 July 2011

DEARS

as per sec-194A OF TDS EVERY BANKING COMPANY TO WHICH BANKINK REGULATION ACT APPLY SHALL NOT DEDUCT TDS ON :-

SUCH INCOMES CREDITED OR PAID IN RESPECT OF DEPOSITS OTHER THAN TERM DEPOSITS i.e FIXED DEPOSITS

HENCE A BANKING SHALL NOT DEDUCT TAX ON INTEREST INCOME ON SAVING A/C BALANCE &RECURRING DEPOSITS.

THEREFORE IN MY VIEW BANK EMPLOYEE IS RIGHT

NOW THE QUESTIONS IS WHETHER SUCH INTERST INCOME IS TAXABLE IN THE HANDS OF ASSESSE

1. SEC-191 SAYS ASSESSE SHALL BE LIABLE TO PAY TAX DIRECTLY HIMSELF AS PER THE PROVISION OF INCOME TAX ACT IF THERE IS NO PROVISION IN THE CHAPTER OF TDS FOR SUCH INCOME

2.THEREFORE IN MY VIEW IT IS TAXABLE IF IT IS NOT EXEMPTED U/S 10(15) OR ANY OTHER CLAUSE OF SEC-10

I HV READ THE SEC-10(15) THERE IS NO EXEMPTION FOR SUCH INTERST .

CONLUSION THE ASSESSE HIMSELF HAS TO INCLUDE SUCH INCOME IN HIS GTI THEN APPLY THE TAXING PROVISIONS

IF HIS INCOME EXCEED THE MAXIMUM EXEMPTION LIMIT, SUCH INTEREST WOULD BE TAXABLE

THANK U