Interest on bank deposits and company payment received (other than regular salary)
pundalika achyuta bhat
(Querist) 30 July 2014
This query is : Resolved
Sir, my daughter works for IT company as a permanent employee and earns regular salary income. On verification of her 26-A income tax credit details I have found out the following:
Int. on Bank Fixed Deposits ... Rs. 21,912
Payment received from XYZ Co... Rs. 5,760
Total ...Rs.27, 672
As per existing I.Tax law Interest on Bank Deposits up to Rs.10, 000=00 is not taxable. In the case of company deposits interest up to Rs.5, 000=00 is not taxable. Now my question is how much of Rs, 27,672=00 is treated as Income from other sources? Which one of the following is right? :
( A) 21,912 - 10,000 = 11,912 + 5,760-5,000=00= 760 (Rs.11, 912 + 760 = 12,672=00 -OR-
(B) Rs.11, 912 + 5,760 = 17,672=00. Which of the following is right? (A) -OR- (B)
With regards, Pundalika Achyuta Bhat.
Devajyoti Barman
(Expert) 31 July 2014
Your CA or Tax Consultant can better advise you.
Rajendra K Goyal
(Expert) 31 July 2014
Interest on Fixed deposit with Banks is not tax free. Only interest earned on Saving accounts upto 10,000/- u/s 80 TTA is exempted. For details consult your tax consultant.
Deduction in respect of interest on deposits in savings account (Section 80TTA):
Section 80TTA has been introduced from the Financial Year 2012-13 and it allows to an employee from his gross total income if it includes any income by way of interest on deposits (not being time deposits) in a savings account, a deduction amounting to:
(i) in a case where the amount of such income does not exceed in the aggregate ten thousand rupees, the whole of such amount; and
(ii) in any other case, ten thousand rupees.
The deduction is available, if such savings account is maintained in a
(a) banking company to which the Banking Regulation Act, 1949, applies (including
any bank or banking institution referred to in section 51 of that Act);
(b) co-operative society engaged in carrying on the business of banking (including a cooperative land mortgage bank or a co-operative land development bank); or
(c) Post Office as defined in clause (k) of section 2 of the Indian Post Office Act, 1898,
For this section, "time deposits" means the deposits repayable on expiry of fixed periods.)
T. Kalaiselvan, Advocate
(Expert) 02 August 2014
Expert Rajendra K goyal has given an elaborate reply to your query, if not satisfied, you may consult your auditor for further opinions.
