I had earned some interest from my savings account this year. Do I need to show this interest income as taxable while filing my Income Tax Return in India? how should I report it?
Yes, the interest earned on your savings account is taxable in India, and you are required to report it while filing your Income Tax Return (ITR). Many people miss this step because banks usually deduct TDS on fixed deposits but not on savings accounts. Here’s how you can handle it:
How Savings Account Interest is Taxed
The interest you earn is added to your “Income from Other Sources.”
It is then taxed as per your applicable income tax slab rate.
Exemption Available (Section 80TTA)
You can claim a deduction of up to ₹10,000 on savings account interest in a financial year (if you are below 60).
For senior citizens, Section 80TTB applies, with a higher limit of ₹50,000 (covering both savings and fixed deposit interest).
Where to Report in ITR
1. Go to the “Income from Other Sources” section.
2. Enter the total interest earned from all savings accounts (you can get this from your bank statements or interest certificate).
3. Claim deduction under Section 80TTA/80TTB in the “Deductions” section.
Tip: Always include interest from all bank accounts (private, public sector, or co-operative banks) to avoid mismatches with AIS/Form 26AS.