Unlike from the past years, the salaried class are asked to show the break up of the interest income received last year while filing the income tax returns for the year 2018-19.
The new option in the ITR-1 made it difficult to claim wrong tax breaks relating to interest income as the income tax department will be able to detect this easily. However, as earlier ITR forms asked for a declaration of consolidated interest from all sources – which includes interest from fixed deposits etc.
Section 80TTA of the Income Tax Act allows taxpayers to claim up to Rs 10,000 as a deduction from income from savings accounts with banks and post offices.) Similarly, from FY 2018-19, senior citizens will be allowed to claim up to Rs 50,000 as a deduction from interest income from bank and post office fixed deposits.
The latest income tax return form-1 for the FY 2018-19 asks taxpayers to provide a full break-up of the income and income from any other sources received during the year. The latest ITR-1 form software utility, which is now available on the income tax e-filing website, provides a drop-down menu from which a taxpayer is required to choose and specify the source of income,”
The income tax department can also reconcile that the paid to the assessee on income-tax refund has been offered to tax by him in the ITR. Usually, interest income received by an individual is taxable in his/her hands unless specified in the Income Tax Act.
The income covered under section 80TTB includes interests earned from the savings account, fixed deposits, recurring deposits, or any other deposits held with a bank, post office or cooperative society. Interest received from any other sources such as company FD or interest from bonds, non-convertible debentures is not eligible for deduction.