I have earned savings bank interest. Is all of it taxable?
Roopesh Saha, Noida
The interest earned from savings bank is taxable under the head ‘Income from Other Sources’. However, you could claim deduction with a cap to reduce your tax outgo on the interest earned under Section 80TTA. Under this section, deduction from gross total income of an individual or HUF, up to a maximum of Rs 10,000 in respect of interest on deposits in savings account with a bank, co-operative society or post office can be claimed. However, Section 80TTA deduction is not available on interest income from fixed deposits. So, if the interest earned from savings deposits is less than Rs 10,000 in a financial year, you need not pay any tax on the interest earned. But, the same is not the case if the interest income is above Rs 10,000, in which case the sum above this limit will be added as income from other sources and taxed based on the income tax slab you fall under.
