ITR query - Related to RD interest income

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Deal Cadet
ritikjain56

Hi dimers,
Is it necessary to disclose the income from interest on Recurring deposit (around 18k)
I looked on internet and found that upto 40000 no tax will be levied but when I am declaring it as income from deposit not even 10k is exempt and the whole 18k is considered as taxable income.
Also no TDS deducted from bank on that and no mention of this in form 26A.
Should I leave it blank/undisclosed ?
Also the saving account interest around 6k that I declared as income can be later claimed in deduction but no option to claim deduction for the recurring deposit.

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Deal Subedar Deal Subedar
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Whether after adding your RD income, Total income exceeds the slab of 2.5 lac??

Deal Subedar Deal Subedar
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BDW upto 5lac no need to worry about the tax, you can add such income because upto 5 lac you will get at rebate to the tax amount or 12,500 which ever is lower.

So if your total income is below 5lac then it doesn’t make any difference for adding such amount.

Deal Subedar Deal Subedar
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U might have submitted 15G, that is why TDS not deducted.

Deal Subedar Deal Subedar
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161508-v2.0 wrote:

U might have submitted 15G, that is why TDS not deducted.

Limit is now 40k for deducting TDS, whether an individual submit 15G or not.

Deal Subedar Deal Subedar
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You are correct.

The 10k deduction under 80TTA is allowed only for Interest earned on Savings Accounts.

Not disclosing the 18k interest earned on RD in your returns will be, a wilful attempt to evade tax.

“Tax evasion has always been a criminal offence in India. There are a number of provisions relating to prosecution under Chapter XXII of the Income-tax Act, 1961. Failure to file timely return of income, false statement and verification, wilful attempt to evade tax, fabrication of accounts and documents and failure to deposit tax deducted or collected at source attract minimum rigorous imprisonment of three/ six months.”

You probably have found the the answer to your dilemma by now.

https://www.thehindu.com/business/Economy/tax-e...

Deal Subedar Deal Subedar
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@ritikjain56 If you add the RD income you will not get any deduction of it, Only Saving Bank interest is eligible for Deduction Upto 10K.

However for senior citizen limit is 50 K (Including all interest Saving interest, FD Interest, RD interest)

Deal Subedar Deal Subedar
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teriab33 wrote:

You are correct.

The 10k deduction under 80TTA is allowed only for Interest earned on Savings Accounts.

Not disclosing the 18k interest earned on RD in your returns will be, a wilful attempt to evade tax.

“Tax evasion has always been a criminal offence in India. There are a number of provisions relating to prosecution under Chapter XXII of the Income-tax Act, 1961. Failure to file timely return of income, false statement and verification, wilful attempt to evade tax, fabrication of accounts and documents and failure to deposit tax deducted or collected at source attract minimum rigorous imprisonment of three/ six months.”

You probably have found the the answer to your dilemma by now.

https://www.thehindu.com/business/Economy/tax-e...

Yes this will treated as evasion of tax, when after adding this particular income creates any loss to department in form of tax, otherwise if anyone income is below 2.5 lac it does not mandatory to file ITR. Its always advisable to file ITR in such cases.

Critic Critic
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https://cleartax.in/s/other-income-s...es

That 40k limit is up to which bank does not deduct tds for all the interest income earned by a person in a financial year, it does not mean you don’t have to pay tax on it. You get tax exemption for savings acc interest & fd/rd income for up to 10k in a financial year.

Deal Cadet Deal Cadet
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Sher_20 wrote:

BDW upto 5lac no need to worry about the tax, you can add such income because upto 5 lac you will get at rebate to the tax amount or 12,500 which ever is lower.

So if your total income is below 5lac then it doesn’t make any difference for adding such amount.

No bro its more than 5L

Deal Subedar Deal Subedar
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ritikjain56 wrote:

No bro its more than 5L

Then bro you need to show definitely, as it can be traced easily through bank statement by income tax department in case of scrutiny.(if any)

Deal Cadet Deal Cadet
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guest_999 wrote:

https://cleartax.in/s/other-income-s...es

That 40k limit is up to which bank does not deduct tds for all the interest income earned by a person in a financial year, it does not mean you don’t have to pay tax on it. You get tax exemption for savings acc interest & fd/rd income for up to 10k in a financial year.

Exactly atleast a total of 10k should be exempted
But only around 6k of saving account interest is exempted
What about the remaining 4k out of 10k limit ?
Or the 10k limit is just for saving account interest ?

Deal Subedar Deal Subedar
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guest_999 wrote:

https://cleartax.in/s/other-income-s...es

That 40k limit is up to which bank does not deduct tds for all the interest income earned by a person in a financial year, it does not mean you don’t have to pay tax on it. You get tax exemption for savings acc interest & fd/rd income for up to 10k in a financial year.

Yes 40k is for just limit for deduction of TDS by bank.

Deal Subedar Deal Subedar
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ritikjain56 wrote:

Exactly atleast a total of 10k should be exempted
But only around 6k of saving account interest is exempted
What about the remaining 4k out of 10k limit ?
Or the 10k limit is just for saving account interest ?

10k limit is for only saving bank account..

Deal Subedar Deal Subedar
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ritikjain56 wrote:

Exactly atleast a total of 10k should be exempted
But only around 6k of saving account interest is exempted
What about the remaining 4k out of 10k limit ?
Or the 10k limit is just for saving account interest ?

You need to take deduction of only saving interest upto 10k in excess of 10k will be taxable and if below 10k the balance is not eligible for deduction it will get lapsed.

Critic Critic
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ritikjain56 wrote:

Exactly atleast a total of 10k should be exempted
But only around 6k of saving account interest is exempted
What about the remaining 4k out of 10k limit ?
Or the 10k limit is just for saving account interest ?

Yes 10k exemption limit is only for savings acc interest, fd & rd are fully taxable for non-senior citizens & that is why they are never recommended as a good investment option by financial experts.

Deal Captain Deal Captain
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According to income tax act 1962 u/s 80TTA the interest income from deposit must be exempt max 10k. But in your case your company has a technical mistakes because in form 26a have no tax deductible at source. Now you have type mail to Finance and HR department to clarify issue.

Critic Critic
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The reason I prefer to park money in high interest savings account instead of RD, at least till the 10K limit is utilised.
RD/FD interest is fully taxable as Income from Other Sources.

Deal Lieutenant Deal Lieutenant
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ritikjain56 wrote:

Thank you guys @CA_A_N_K_I_T_20 @teriab33 @guest_999
Will disclose the exact amount in ITR
Don’t want to play smart ass tricks with ITR stuck_out_tongue_closed_eyes

Not only you have to disclose income from other sources, but also deposit advance tax in the beginning of financial year to avoid interest on additional tax payable on income from deposits. If you simply declare while filing IT Return, an interest penalty will be levied

Critic Critic
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aam_aadmi wrote:

Not only you have to disclose income from other sources, but also deposit advance tax in the beginning of financial year to avoid interest on additional tax payable on income from deposits. If you simply declare while filing IT Return, an interest penalty will be levied

Advance tax is only applicable if final tax liability is coming out to be more than 10k after tds deduction.

Deal Cadet Deal Cadet
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aam_aadmi wrote:

Not only you have to disclose income from other sources, but also deposit advance tax in the beginning of financial year to avoid interest on additional tax payable on income from deposits. If you simply declare while filing IT Return, an interest penalty will be levied

I am claiming for refund now.
TDS already deducted by company

Perfectionist Perfectionist
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How does taxation work for FDs which get auto renewed by the bank every X years (if not closed)

Tax payable every year or only after maturity?

Deal Subedar Deal Subedar
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panchabhut wrote:

The reason I prefer to park money in high interest savings account instead of RD, at least till the 10K limit is utilised.
RD/FD interest is fully taxable as Income from Other Sources.

Sir, this means if we park money in IDFC first (7% interest) , let’s say 2 lacs . Then 14000 interest we earn , 14-10k= 4k is income from other source ?? and same 2L in fd , then 14k is income from other source ?

Deal Subedar Deal Subedar
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What is charge/fine for filing ITR 1 after due date ? If income is less than 5 L ??

Deal Cadet Deal Cadet
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ZitOO wrote:

Sir, this means if we park money in IDFC first (7% interest) , let’s say 2 lacs . Then 14000 interest we earn , 14-10k= 4k is income from other source ?? and same 2L in fd , then 14k is income from other source ?

Under B3. Income from Other Sources, Interest from Saving Account = 14k

Then use 80TAA for 10k exemption.

Critic Critic
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ZitOO wrote:

What is charge/fine for filing ITR 1 after due date ? If income is less than 5 L ??

Rs.1000 if income is less than 5 Lakh(this also gross income before any deduction I think) till 2.5 lakh & zero if gross income(before any deduction) is less than 2.5 lakh.

Deal Cadet Deal Cadet
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avgn wrote:

How does taxation work for FDs which get auto renewed by the bank every X years (if not closed)

Tax payable every year or only after maturity?

You can download interest certificate from netbanking. most of the bank provides it on netbanking . It will give you interest amount accrued for that particular year.

Deal Cadet Deal Cadet
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You should disclose any such interest income because in case any inquiry comes, it is clearly visible in bank statement.
Many people don’t show it in ITR but it is advisable to show it.

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