ITR Filing 2024: How to File ITR for Fixed Deposit Income; Step-by-Step Guide

Submitting income tax returns (ITR) can overwhelm you when you have several income sources. Interest from fixed deposits (FDs) counts as one such source. As the ITR filing deadline nears, this simple guide aims to help you report your FD income.

Getting to Grips with Fixed Deposit Income

Fixed deposits offer a popular way to invest guaranteeing returns over a set time. The government views interest from FDs as taxable income so you must declare it in your ITR. Banks deduct tax at source (TDS) on interest earned above a certain amount. Yet, you still need to include the total interest income in your tax return.

How to File ITR for Fixed Deposit Income

1. Get Your Documents Together: Round up all the important documents such as your FD account statements Form 16A (TDS certificate), and Form 26AS (yearly tax statement). These will help you figure out the total interest you’ve earned and the TDS taken out.

2. Choose the Correct ITR Form: Depending on your overall income and sources, select the correct ITR form. For individuals with income from salary, one house property and other sources, ITR-1 (Sahaj) is usually the correct form. However, if you have capital gains or business income might need to use ITR-2 or ITR-3.

3. Calculate Total FD Interest Income: Sum up interest earned from all your fixed deposits during the financial year. This total interest income needs to be reported under the head ‘Income from Other Sources’. Use this in your ITR form.

4. Enter Details in the ITR Form: Log in to the income tax e-filing portal. Start filling out the ITR form. In the ‘Income from Other Sources’ section, enter total FD interest income. Ensure you also provide details of the TDS deducted by the bank. This can be cross-verified using Form 26AS.

5. Claim Deductions if Applicable: If you qualify for deductions under Section 80C to 80U ensure you claim them to reduce taxable income. This can include deductions for investments, health insurance premiums and more.

6. Verify and Submit Your ITR: After filling in all required details, review the form carefully to ensure accuracy. Once checked, submit your ITR electronically. Don’t forget to e-verify your return using methods like Aadhaar OTP, net banking or send a signed physical copy to the Centralized Processing Center (CPC).

Reporting fixed deposit income in ITR is crucial to remain compliant with tax laws and avoid penalties. Follow these steps to file ITR accurately and on time. Ensure smooth hassle-free tax filing experience. Remember to keep detailed records. Staying informed about tax regulations will always work in your favour.