You can see tax deducted from my fixed deposit account
Can we file an Income tax return on tax debited on interest of Fixed deposit in India?
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2 Answers
Yes. While you file Income Tax Return, you can include any interest earned (this includes FD, RD and SB accounts) as other income. Any tax deducted at source can be included in tax paid section. So the amount of Rs.2336 of tax deduction in your question will go to tax paid section.
As per laws applicable for FY 2014-15, a bank branch would deduct 10% TDS on interest earned with that bank branch if total interest earned in their branch is more than Rs.10000. Interest earned on all Fixed Deposits are considered for this calculation, however interest earned on Recurring Deposits and Savings Bank Accounts are not included. Though bank deducts only 10%, you are liable as per your tax slabs based on your total income. So you have to either pay the remaining tax or claim the excess paid while you file your return as the case is applicable. Note that banks deduct 20% TDS if your PAN is not updated with them.
Any interest earned on Savings Bank Accounts and Recurring Deposits are also to be added to your other income. You get tax exemption upto Rs.10000 for Savings Bank Account interest under section 80TTA.
To illustrate, consider your case as below
Bank ABC Branch A, FD 1 - Interest 2336, TDS 2336
Bank ABC Branch A, FD 2 - Interest 26456, TDS 543
Bank ABC Branch A, FD 3 - Interest 675, TDS 0
Bank ABC Branch A, RD 1 - Interest 389
Bank ABC Branch A, SB 1 - Interest 1327
Bank ABC Branch B, FD 1 - Interest 3716, TDS 0
Bank XYZ Branch C, SB 1 - Interest 9625
So, your total interest earned is 2336+26456+675+389+1327+3716+9625 = 44524, which should be added to your other income.
And add 10000 to 80TTA section for tax exemption towards Savings Bank Account interest. This is when your total Savings Bank interest is more than 10000. If your total Savings Bank Interest is less than 10000, then your total Savings Bank Interest should be mentioned against 80TTA instead of 10000.
Can we file an Income tax return
You must file returns that include the interest earned as income and pay tax accordingly. The tax deducted at source is nominal at 10%