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Tax savig fd interest

neha (Others) (420 Points)

26 March 2018

i took a tax saving fd in 2013 with pay interest quaterly but i didnt know tht the interest had to be calculated even for tht every year so i was filing returns without including tht interest. its getting matured in 2018 i was thinking the whole interest together has to be filed as income in 2018, now i see it was being paid already every quarter in to my account...so what do i do? plz guide

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14 Replies

Deepika Yadav (561 Points)
Replied 27 March 2018

Yes You can show whole amount of interest in Itr as current income for a. Y. 2018-19

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (170785 Points)
Replied 27 March 2018

" now i see it was being paid already every quarter in to my account..."

It cannot be taken as oversight mistake ....... which continuously got repeated for last five years........

It will be treated as concealment of income, and liable for interest and penalty.

Though you may treat the total interest as capital gains in the final year and pay tax over it, to safeguard yourself against levy of any penalty..

neha (Others) (420 Points)
Replied 27 March 2018

Originally posted by : Dhirajlal Rambhia
	" now i see it was being paid already every quarter in to my account..." It cannot be taken as oversight mistake ....... which continuously got repeated for last five years........ It will be treated as concealment of income, and liable for interest and penalty. Though you may treat the total interest as capital gains in the final year and pay tax over it, to safeguard yourself against levy of any penalty..

yes i agree...it was absolutely carelessness on my part....all i have to say in my defense is the certifcate said tds will be deducted on maturity and all these years no tds was deducted hence i missed it....but i will do as advised and treat the whole interest as income in the final year and pay tax on that.

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (170785 Points)
Replied 27 March 2018

" my defense is the certifcate said tds will be deducted on maturity and all these years no tds was deducted.........."

In case, (usually doesn't happen), TDS is deducted at maturity; you will not be at fault at all, and as such have good stand to offer tax at maturity.

RAMAKRISHNAN R (INCOME TAX OFFICER) (1736 Points)
Replied 27 March 2018

instead of offering in the current year, it's better to file a rectification application before your ao and include the respective omitted interest income in the concerned a.y. in this way you may incur 234b and 234c interest but as far as my point of view this would be the better option...

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neha (Others) (420 Points)
Replied 27 March 2018

Originally posted by : Dhirajlal Rambhia

" my defense is the certifcate said tds will be deducted on maturity and all these years no tds was deducted.........."

In case, (usually doesn't happen), TDS is deducted at maturity; you will not be at fault at all, and as such have good stand to offer tax at maturity.

sir,

then can i calculate the total interest of these 5 years and show as income next year when it matures irrespective of if tds is deducted then or not. as anyway i can file rectification only for 2 years and not beyond tht, so no point....what would u advise me in this case?

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (170785 Points)
Replied 27 March 2018

What is the total interest amount? Aggregate of 5 years?

or each year?

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (170785 Points)
Replied 27 March 2018

Verification from bank, whether TDS will be deducted at maturity?

neha (Others) (420 Points)
Replied 27 March 2018

for each year it was about 7000/- tht was paid so for 5 years its 35000 and i cross checked no tds was dedcuted anytime till now for it

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (170785 Points)
Replied 27 March 2018

As per rules, TDS was not applicable to be deducted for any of the earlier year/s (being less than 10K), and will not be deducted even at maturity.

But as per FD receipt, if you can confirm the TDS deduction at maturity....... you have option to declare the total gain in the last year.........

Otherwise, as per rule, revise/rectify the returns of previous 2 years, & file rectification for earlier year/s.

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CA Neha Agrawal (CA) (830 Points)
Replied 27 March 2018

Dhirajlal Rambhia- why interest earned over 5 year period is to be treated as capital gain to pay tax. It can still be treated as Income from Other Sources- interest income.

neha (Others) (420 Points)
Replied 31 March 2018

Originally posted by : Dhirajlal Rambhia
	Verification from bank, whether TDS will be deducted at maturity?

sir so shud i wait for 2 more years and then include the whole as my income after maturity or shud i start includeing it form this year and if i get notice then to correct it for the previous years?...what wud be the best approach?

neha (Others) (420 Points)
Replied 31 March 2018

Originally posted by : Dhirajlal Rambhia
	As per rules, TDS was not applicable to be deducted for any of the earlier year/s (being less than 10K), and will not be deducted even at maturity. But as per FD receipt, if you can confirm the TDS deduction at maturity....... you have option to declare the total gain in the last year......... Otherwise, as per rule, revise/rectify the returns of previous 2 years, & file rectification for earlier year/s.

sir the ceritificate says , maturity value is subject to TDS deduction whenever applicable"

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (170785 Points)
Replied 31 March 2018

Should i start including it from this year and if i get notice then to correct it for the previous years?... ........... Yes, that would be better approach.......