When to pay tax on interest income from FD/RD ?

POSTED BY naveen7687 ON April 10, 2014 11:41 am COMMENTS (4)

Hello,

I am a salaried employee and the only other income I have is interest from FD/RD. For a case where your tax liability on interest income from FD/RD is less than Rs. 10000, then I have a following queries:-

1) You have to pay advance tax or self assessment tax on the interest income?

2) If you pay taxes after March 31st of the financial year , do you have to pay the interest as well for delay.

Thank you!

 

4 replies on this article “When to pay tax on interest income from FD/RD ?”

  1. Paresh Shetiya says:
    April 12, 2014 at 7:43 pm

    Dear Naveen,

    Advance tax is payable only if tax liability is Rs 10,000 or more. Since you had a residual tax liability (after TDS deduction by your employer) of below Rs 10,000, I am of the opinion that you were not liable to pay advance tax in the first place.
    Hence the question of payment of interest does not arise, as interest is payable only if there is default in payment of income tax. Hence, in my opinion, you will have to pay the amount of tax as self assessment tax, without any interest.

    Thanks,

    Paresh

    Reply
  2. ashalanshu says:
    April 11, 2014 at 8:07 am

    Dear Naveen, a delay in payment of tax is a delay. Your exl. ITR utility ‘ll calculate the Tax to be paid along with the interest if any. Regarding your situation for not knowing exact interest figure, you should contact your bank in March itself to get a tentative figure and pay tax on that figure as per your slab rate.

    Thanks

    Ashal

    Reply
  3. naveen7687 says:
    April 10, 2014 at 10:10 pm

    Dear Ashal,
    Thanks for your reply. Just one clarification. If you have to pay self assessment tax on interest income only (Other tax liability will be taken care by TDS deducted by employer), still you have pay interest for delays if any? In case of flexible RD you don’t know how much interest income you are going to generate for the financial year before 31st March when it actually accrues/credits in your account.

    Thanks
    Naveen

    Reply
  4. ashalanshu says:
    April 10, 2014 at 4:16 pm

    Dear Naveen, yes is the answer for interest on delay part. How to calculate, please use ITR-1 online form or exl. utility available at incometaxindiaefiling.gov.in

    Thanks

    Ashal

    Reply

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