ITR filing 2024: Step-by-step guide for reporting fixed deposit interest income

As the deadline for filing Income Tax Returns (ITR) for the financial year 2023-24 nears, taxpayers need to ensure that they accurately report all sources of income. One common yet often overlooked source of income is the interest earned from fixed deposits (FDs).

Understanding fixed deposit income

Fixed deposits are still considered to be one of the most popular investment options in India due to their guaranteed returns and safety. The interest earned on FDs is considered taxable income under the head "Income from Other Sources." It is essential to declare this income while filing your ITR to avoid any penalties or legal issues.

Here’s a complete guide on how to file your ITR for fixed deposit income in 2024:

Collect the necessary documents

• Interest certificates: Obtain interest certificates from your bank(s) for the fiscal year 2023-24. These certificates provide a summary of the interest earned on your FDs.

• Form 26AS: This form provides information on interest income and any tax deducted at source (TDS).

• Forms 15G and 15H: To avoid TDS on FD interest

Form 15G is applicable for individuals below 60 years of age whose total income is less than the taxable limit. By submitting Form 15G to your bank, you can be sure that no TDS is deducted on your FD interest, as long as your total taxable income is below the exemption limit.

Form 15H is for senior citizens (60 years and more) with total income less than the taxable limit.

Calculate total interest income:

Sum up the interest earned from all your fixed deposits during the fiscal year. Ensure that you include interest from all banks where you hold FDs.

Check TDS details:

If the interest earned in a financial year exceeds ₹40,000 (₹50,000 for senior citizens), banks deduct TDS. Verify the TDS details stated in Form 26AS on the website of the Income Tax Department.

Select the correct ITR form:

Depending on your income sources, choose the correct ITR form. ITR-1 (Sahaj) is for individuals with income from salary, one house property, and other sources including FD. ITR-2 is for individuals or HUFs who are not eligible for ITR-1 and do not have any income from profit and gains of business or profession.

File your ITR:

After filling in all the necessary details, file your ITR online through the Income Tax Department’s e-filing portal. Verify your return using Aadhaar OTP, net banking, or by sending a signed ITR-V to the Centralised Processing Centre (CPC).