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Why there is difference between the 26as and actual interest

jraju (Others) (283 Points)

02 September 2017

Hi, After linking pan with aadhar, the statement of interest from aadhar linked banks are shown while efiling. But , what i calculated by adding the actuals and the amount shown in the form differs. I just calculate on the credit of my interest from the respective banks. But, i do not know, how the 26AS is worked out. Any expert advice on this.

If the amount i calculate is on the higher side , no problem. But if it is less , then there is needless correspondence and chance of paying of penalty.

In a nutshell, how those are extracted in to the form, if there is no change in the deposit and only interest received is taken in to account

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12 Replies

RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 02 September 2017

Actually you can't said How to you received Interest...? Its fixed Deposit...?

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Kiran. S (CTO) (745 Points)
Replied 04 September 2017

@ jraju - Only for interest above 10k in a year of all FD bank accounts TDS is deducted which will be reflected in 26AS. Other saving bank interest you should show it on income side and under 80TTA. upto 10k will be deducted u/s 80TTA.

jraju (Others) (283 Points)
Replied 04 September 2017

Hi, Kiran, If that is the case then , i need not ask this question. Is it true that up to 10000, no TDS is deducted. For fixed deposit, even amount less than 10000 is subjected to tax and nothing is exempted , even if it is credited to Savings Bank Account. We give 15 g , to banks not to deduct tax at their end. But nothing, is exempted in case of fixed deposit, but only on the interest accrued to the savings bank account is exempted up to 10000. Please confirm Kiran.

My question is the actual amount i received as interest varies from the 26 AS as given by the banks concerned. Pl expecting reply

Kiran. S (CTO) (745 Points)
Replied 04 September 2017

@ Jraju - You are confusing between TDS and Exemption .

All income accrued to you in all the banks by the way of interest is taxable.

As far as TDS is concerned - only for Interest above 10k - 10% TDS is deducted.

Bank Name Interest in FY TDS

Bank ABC Rs 11000 1100

Bank XYZ Rs 8100 Nil

Bank PQR Rs 15000 1500

All Banks(sav) Rs 24000 Nil

In 26AS only 26000 TDS 2600 will be reflected.

In ITR under the head income from other sources take Rs 58100

In 80TTA fill 24000 - system will calculate Rs 10000

i hope this is clear

jraju (Others) (283 Points)
Replied 04 September 2017

Hi, Thanks for wealth of information by illustrating. The confusion exist not only for me . Please say what is the difference between the two. I presume the TDS is the Tax deducted at source and exemption is the various exemptions , one could avail. I have seen your illustration.

If suppose, i am getting say less than 10000 interest on FD from a particular deposit in a year, is that exempted from TAX?

I ask this question, because, i have totalled al the interest from FD received from each deposit and shown totally all as taxable. I just added this to my gross income from pension and then arrived at the taxable income.

So, If only TDS is effected on the amount more than 10000 on every FD, then does that mean, that bank only deducts so much amount, and the balance we have to pay the remaining separately. Still the confusion. I ask some bank personnel, but they simply say that you furnish the form . Pl clarify this point

Do you mean to say , that there is some concession up to 10000 under 80tta,

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Kiran. S (CTO) (745 Points)
Replied 04 September 2017

1) Interest on FD less than 10k is not exempt from tax but TDS will not be deducted

2) Yes correct all are taxable under the head "income from other sources" - Pension comes under head salaries.

3) Yes TDS will be deducted for interest above Rs 10k and rest of the tax you have to pay as per tax slab.

4) All saving bank interest (not FD) upto 10k will be deducted from your total income while computing tax.

jraju (Others) (283 Points)
Replied 04 September 2017

Hi, Thanks for clarification, I have not heard about 80tta so far. I just deducted in 80c and i will see what it means under 80 tta. If the taxes have not been dedcuted at the bank, (furnishing of 15g or 15h), one has to add the interest as other income and arrive at the tax to be paid. If the tax is deducted, then 10000 will be shown as auto deducted in 80 tta. If no tax is deducted, then we have to just leave that column 80tta blank and then arrive at the tax. Is my understanding correct? I have seen your profile and you are expert in answering to the questions,knowing that one needs clarification on a point, and just not posted the link. Thank you so much.

Kiran. S (CTO) (745 Points)
Replied 04 September 2017

@ J Raju - You are confusing again between FD interest and saving bank interest which is 3.5%/4%/6%(Yes bank) .

Interest on saving bank upto 10k will be deducted from you total income under 80TTA ( and not from your tax liablility) . You have to fill the income amount in ITR return in 80TTA .

Nothing is exempt under interest from FD.

jraju (Others) (283 Points)
Replied 04 September 2017

Hi, Thanks. I also verified and 88tta totally relates to savings bank account interest. Now , my question may be thought of , . How to correct the difference. You mean that tds would show the amount higher than 10000 in your total interest from a FD account.

Kiran. S (CTO) (745 Points)
Replied 04 September 2017

Income TDS

1) Pension Income = 2,40,000 Nil

2) Sav Bank Int = 11,000 Nil

3) FD int = 34,000 1800 (deducted on 18000 only)

4) other income = 7500 Nil

Total 2,92,500 1800

While filing ITR-1 take s.no in salary and s.no 2,3,4 in other income

in deductions fill other 80C and 80TTA as 11000 - system will calculate 10000

Fill TDS as per 26AS . say calculate tax and upload

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mudit gupta (2 Points)
Replied 15 July 2018

I have my fixed deposits for which I received Interst Statement showing TDS deducted of Rs 3197. While in 26AS downloaded from the income tax website shows TDS on those fd much less than as deducted and shown in interest statement.

what should I do now?

jraju (Others) (283 Points)
Replied 16 July 2018

Hi, There is bound to be confusion, as long as this concerned. From the replies , it is infered that interest FD on minimum amount also would be taxable, even when you give 15g or not. Only thing is Banks will not do that for you and you have to note it in your tax return.

Regarding Savings bank account , one seldom knows the interest or one seldom finds any cacluation in the itr form when you give the inputs. The 10000 exemption is only available on the savings bank deposits, which is less than 5 percent and depends on the miniimum amount in a month or so. I do not know the exact way of calculating the interest on deposits, as you will withdraw most of the amount from this account and wuld use it as a means of planning day to day expenditure and saving.

The 26 AS wouldl not reflect the interest on the banks on whch you have fixed deposit amount that fetch less than 10000 per year. Thiswas cleared in the post by Sri Kiran clelarly.

The 26 AS would reflect only the name of the bank and interest details only on the banks that gives you more than rs.10000 interest and leaving the other banks that gives less than 10000, there by hiding the actuals of the interest, but would expect you to give all the details including those lesser interest while calculating and filing the itr.

Tax experts would be knowing more, but ordinary man would not understand thay this is about.

But stilll confusing is the thing that when i downloaded the 26 AS for the year, only a fewr amoutn has been shown in one bank . Atleast they could have provided the whole interest details in the form.

But i file the return by going to banks to get the exact details and acccrdingly add in other income to arrive at the tax.

Will some experts give ideas