I am a senior citizen and have a few FDs in the bank. Am I supposed to pay tax against the interest, and should it be added to my pension to calculate the tax liability. The bank is already deducting 10% as TDS. Do we need to claim that too?
Surender Pal Makhija, Delhi
The interest earned from FDs is not exempt from income tax in the hands of any taxpayer, including senior citizen. Thus, pension income and interest income on FD shall be added to calculate the total income. The basic exemption limit in case of a resident individual of the age of 60 years or more (senior citizen) and resident individual of the age of 80 years or more (very senior citizens) is Rs 3 lakh and Rs 5 lakh, respectively for the financial year 2016-17. The tax deducted by the bank shall be available for credit against tax payable, if any, on the taxable income.
