BENGALURU:
In a circular released on Tuesday, the Central Board of Direct Taxes has warned
the taxpayers who do not declare all their interest income in their ITRs to
correct their ways. They have been asked to re-file and rectify their returns
for FY 2013-14 onwards.
You'll
have to declare even those interest incomes where Form 15 G/H have been filed
and the total exceeds the maximum amount not chargeable to tax, that is, Rs 2.5
lakh. Only interest income up to Rs 10,000 exempted under Section 10 may
be left out. The deadline for this is 31st March 2016. If missed, you will be
liable to pay a Rs 5,000 penalty under avoid penalty Section 271F of the I-T
Act.
While
form 26AS reflects only those payments on which tax has been deducted, the
department can track your other deposits and interest payments received without
deduction of tax too via information received from banks and other financial
institutions. "Information regarding interest earned by
individuals and business entities on term deposit is filed with the Income
Tax Department by banks including co-operative banks and other financial
institutions and state treasuries, etc," said the circular.
In
an online survey conducted by economictimes.com last August, 30% of the 2,168
respondents believed that interest of up to Rs 10,000 from bank FDs is tax free
in a year. However, as per the rules,the exemption under Section 80TTA is only
for the interest on the savings bank accounts. What one earns from on
fixed deposits and recurring deposits is fully taxable. You also need to
declare all those interest income where TDS has been deducted or you have filed
Form 15 G/H.
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