Didn't report FD interest? Here's how you may do it
Fixed Deposits (FDs) are one of the popular ways of investment as many people invest in them to get an income from interest. However, such an FD interest is fully taxable and must be declared in your Income Tax Return (ITR) under the head- ‘Income from Other Sources.’ The FD interest is taxed according to your applicable income tax slab rate, rather than at a flat rate, regardless of whether TDS was deducted by your bank.
ITR deadline to report FD interest
For taxpayers who missed reporting FD interest while filing their ITR for the Financial Year (FY) 2024-25, it is important to act promptly. The deadlines for filing both the belated return and the revised return for FY 2024-25 have already passed.
How to fix if you missed reporting FD interest in ITR
Chartered accountant Abhishek Soni, CEO & co-founder, Tax2win, explains, “Taxpayers still have an opportunity to correct the omission through filing an Updated Return (ITR-U). This provision allows individuals to voluntarily disclose any missed income, including FD interest, and rectify errors in their previously filed return for up to four years from the end of the relevant assessment year.”
Why filing ITR-U matters
Soni says since banks report FD interest details to the Income Tax Department through an Annual Information Statement (AIS) and other reporting systems, such omissions can be identified during data matching.
“Instead of waiting for a notice from the I-T Department, taxpayers should consider filing an ITR-U and reporting the correct income. While additional tax, interest, and applicable charges may be payable, voluntary compliance can help avoid future disputes and ensure that the taxpayer's records remain accurate and up to date,” says Soni.
ITR deadline to report FD interest
For taxpayers who missed reporting FD interest while filing their ITR for the Financial Year (FY) 2024-25, it is important to act promptly. The deadlines for filing both the belated return and the revised return for FY 2024-25 have already passed.
How to fix if you missed reporting FD interest in ITR
Chartered accountant Abhishek Soni, CEO & co-founder, Tax2win, explains, “Taxpayers still have an opportunity to correct the omission through filing an Updated Return (ITR-U). This provision allows individuals to voluntarily disclose any missed income, including FD interest, and rectify errors in their previously filed return for up to four years from the end of the relevant assessment year.”
Why filing ITR-U matters
Soni says since banks report FD interest details to the Income Tax Department through an Annual Information Statement (AIS) and other reporting systems, such omissions can be identified during data matching.
“Instead of waiting for a notice from the I-T Department, taxpayers should consider filing an ITR-U and reporting the correct income. While additional tax, interest, and applicable charges may be payable, voluntary compliance can help avoid future disputes and ensure that the taxpayer's records remain accurate and up to date,” says Soni.
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