New Delhi: Your bank deposits have now come under income-tax (IT) department’s scanner. The income-tax department on Wednesday asked people, who have not declared interest earned on their bank fixed deposits for 2013 and 2014, to revise their tax returns by including their interest income.
The department has cautioned people that it receives information about interest earned by individuals on fixed deposits from banks and that they should include the interest income while calculating their total tax liability. “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. Form 26AS reflects only those payments on which tax has been deducted and it can be viewed by the individual tax payer by logging in to www.incometaxindiaefiling.gov.in,” said Central Board of Direct Taxes (CBDT) on Wednesday.
The department has also said that the information about interest payments, without deduction of tax, is also filed by the payer with the department.
Banks deduct tax at source (TDS) if interest earned by an individual in a year is above Rs 10,000 and pass on this information to the tax department.
The rate of TDS deducted by banks is 10 per cent on interest income, if PAN number of the customer is available with the bank. If the bank doesn’t have the customer’s PAN in its records, TDS is deducted at 20 per cent on interest income. The income-tax department said that it is mandatory for people to include the interest income while calculating total tax liability unless such income is exempted under Section 10 of the Income-tax Act.
Section 10 of the Income-Tax Act lists out the types of income that are exempted from the calculation of total income for tax purposes. If anybody has not declared their interest income in the returns for assessment year 2014-15 and 2015-16, the department has asked them to file a revised return after including the interest income.
The assessment years 2014-15 and 2015-16 relate to financial years 2013-14 and 2014-15. “File return of income for assessment year 2015-16, if not filed so far by including taxable interest income if any, on or before March 31, 2016 and avoid penalty,” said the department. The income-tax department has also advised tax payers to contact assessing officer or the toll-free number 1800-180-1961 for more details.
