Your savings account interest income is taxable. You have to add this income to your income from other sources. To find out your interest income for financial year 2014-15 you need your bank statement for your account in which you have earned interest. Here are the steps you need to follow –
- Download your bank statement from internet banking or e-statement in emails or use paper statements if you have one.
- You need to review your statement from 1st April 2014 to 31st March 2015. Your statement may be monthly, quarterly or annual.
- Your statement has Date of transaction, Deposits (Shown as CREDIT) and Withdrawals (shown as DEBIT)
- Interest income is a CREDIT in your account statement.
- Below is an illustrative statement, where interest is credited biannually or twice in a year. Similarly look for interest credited in your account. Here 2 interest credits have been received in the year, you may have 4 credits (quarterly) or may be more credits for interest income in your account.
- Do note that you need to pick up interest for the full year. In the given case Rs 25,044 has been credited on 30th June 2014 for 6 months interest and Rs 25,039 has been credited on 31st December 2014 as interest for another 6 months. You need to include interest income for the FY 2014-15 in your return therefore this can be estimated as follows.
- Rs 25,044 x 3/6 = Rs 12,522 for the period of 1st April to 30th June
- Rs 25,039 for the period of 1st July to 30th December
- Remaining interest of 3 months can be taken on an estimated basis such as Rs 25,039 x 3/6 = Rs 12,519 (taken on an assumption since actual interest has not been credited).
- Therefore total interest to be included in the return is Rs 12,522 + 25,039 + 12,519 = Rs 50,080
- A deduction of Rs 10,000 under section 80TTA is available on this savings account interest of Rs 50,080 which ClearTax shall automatically allow to you.
- Do remember to pick up TDS credit from your Form 26AS for this interest income.
- You’ll have to follow the same exercise to pick up interest from all your bank accounts.
Hope this will help you succeed in adding your interest income to your income tax return.