I was told by a friend that the interest earned from savings bank is taxed. Is it true?
R Vasudevan, Trivandrum
Yes, the interest earned on a savings bank account and even post office savings account is taxable in the hands of the individual. This interest is accounted as income from other sources and you can claim deduction in this respect from the total income subject to maximum cap of Rs 10,000 per financial year under section 80TTA. Any interest income over and above this limit will be taxable as per the applicable income tax slab rate in which you fall.
